The Bundeswehr announced on Wednesday that it is temporarily evacuating non-essential personnel from Erbil, the capital of the Kurdish region.
The Operational Command of the Armed Forces cited increasing regional tensions as the reason for the move.
A military spokesperson declined to reveal the exact number of soldiers being evacuated or those remaining in place.
This precautionary step responds to the escalating tensions in the region.
German magazine Der Spiegel first reported the significant reduction in German forces in northern Iraq.
According to information obtained by Der Spiegel, the Operational Command decided to markedly decrease German troops there.
Non-mission-critical personnel have been preemptively relocated from Iraq.
A briefing to the German parliament stated that this security measure is necessary due to the ongoing rise in tensions between the United States and Iran.
The Bundeswehr supports the development of local armed forces in Iraq.
Berlin's focus remains on the Kurdish-majority city of Erbil in northern Iraq.
Only a small number of German soldiers serve as advisers in the national capital, Baghdad.
Recently, the German army deployed around 300 soldiers for this mission.
However, most of these troops are stationed in Jordan, where the German air force has maintained a small base at Al-Azraq for years.
From there, it provides aerial refueling support to the so-called international anti-terrorism coalition.
The threat level for northern Iraq increased at the end of January due to the growing risk of military confrontation with Iran.
A recent government report indicates that shared use of bases with American forces poses an indirect threat to German armed forces.