The US has announced a long-term plan to pull nearly 12,000 soldiers out of Germany but will deploy about half of them elsewhere around Europe.
Around 6,400 will head home but will be redeployed back to Europe on a rotational basis, while 5,400 will be sent to other European countries including Italy, Belgium and Poland.
US President Donald Trump said Germany was not spending the NATO target of 2% of its GDP on defence and that it was taking "advantage" of the US.
The US European Command (EUCOM) and Special Operations Command Europe will also be moved from Stuttgart in Germany to Belgium.
Even though some experts consider the move a blow for NATO, Mark Esper, US Secretary of Defence, said the move would "in a way strengthen NATO," enhance the deterrence of Russia and reassure allies.
NATO Secretary-General Jens Stoltenberg said in a statement that "the US has consulted closely with all NATO allies ahead of today’s announcement."
"Today’s announcement by Secretary Esper on US forces in Europe underlines the continued commitment by the United States to NATO and to European security. Peace and security in Europe are important for the security and prosperity of North America, and as we face a more unpredictable world, we are stronger and safer when we stand together," he added.
'A major strategic and positive shift'
US officials said that some moves would begin in weeks, probably in the form of air and ground forces sent to countries that already have an American troop presence. It will cost in the "single-digit" billions of dollars, Esper said.
Around 24,000 US military personnel will remain in Germany. An additional 2,500 US airmen currently in the UK, but scheduled to re-base in Germany, will remain where they are.
Esper described the announcement as "a major strategic and positive shift" but stressed that the "size, composition, and disposition of US forces in Europe has changed many times" in the past 71 years.
"Sometimes this has been a result of changes in the threat, sometimes because of other changes in the international environment, and sometimes simply because the borders between NATO countries and Russia have shifted as new Allies have joined," Esper said.
"As we've entered a new era of Great Power Competition, we are now at another one of those inflexion points in NATO's evolution, and I am confident the alliance will be all the better and stronger for it," he added.
'Counter malign influence'
Esper said Washington also plans to rotate more troops to Poland and the Baltics once "burden-sharing" agreements are found.
General John E Hyten told reporters that "while we hope that Russia and China will engage in more productive and cooperative behaviour in the future, we're posturing our forces to deter aggression and counter their malign influence."
Trump, meanwhile, said on Wednesday that the country is "reducing the force because they're not paying their bills. It's very simple. They're delinquent." He added that he might rethink the decision to pull troops out of Germany "if they start paying their bills."
Germany reacted saying it has taken note of the US decision and will be coordinating the implementation of the withdrawal with the affected states, as well as the US government and its NATO partners.
From 400,000 to 74,000
EUCOM was established in 1952 and focused almost exclusively on deterring, if necessary defeating, the Soviet Union.
At the height of the Cold War, there were more than 400,000 US troops stationed in Europe but the collapse of the Soviet Union led to a gradual withdrawal of American boots on European soil.
The focus then shifted to non-warfighting missions, including boosting the security capacity of former Soviet bloc states, prosecuting "crisis management" operations in the Balkans and providing support to US operations in Africa and the Middle East.
Russian actions since 2014, in particular the annexation of Crimea, have prompted the US to increase its rotations of temporary forces in and out of Europe.
Currently, about 74,000 US military personnel are permanently assigned to EUCOM including 34,000 army troops, 27,000 Air Force staff, 3,000 marine and 10,000 Navy personnel.
In a report released in February, the US Congress said that the country would spend $320 million (€272 million) on EUCOM in the 2020 financial year.