US Defence Secretary Pete Hegseth has ordered the withdrawal of around 5,000 US soldiers stationed in Germany, the Pentagon said on Friday.
Washington's move comes after President Donald Trump criticised German Chancellor Friedrich Merz for saying the US had been "humiliated" by Iranian negotiators in the ongoing war, reported BBC.
The US military deployment in Germany - currently at more than 36,000 active duty troops - is by far its biggest in Europe, compared with about 12,000 in Italy and 10,000 in the UK.
Pentagon spokesman Sean Parnell said the order had come from Hegseth. "We expect the withdrawal to be completed over the next six to twelve months," the spokesman added.
Trump, a longtime critic of the Nato alliance, has been lashing out at allies over their refusal to participate in operations to reopen the Strait of Hormuz, a key oil shipping route, said the BBC report.
Trump has also suggested pulling US troops from Italy and Spain.
Last year, Washington decided to reduce its troop presence in Romania, as part of Trump's plan to shift the focus of US military commitment from Europe to the Indo-Pacific region.
There are now growing concerns within the 32-member Nato alliance that the US latest decision could weaken the organisation.
German Defence Minister Boris Pistorius said: "We Europeans must assume more responsibility for our security. Germany is on the right track. We are growing: Our Bundeswehr is expanding, we are procuring more equipment faster and focusing on innovation, and we are building more [defence] infrastructure."
Nato echoed those remarks on Saturday with its spokeswoman Alison Hart saying: "This adjustment underscores the need for Europe to continue to invest more in defence and take on a greater share of the responsibility for our shared security, where we're already seeing progress since Allies agreed to invest 5% of GDP."