But American officials warned that the struggle against al Qaeda in Iraq and other insurgents was not over in the western region, the scene of some of the bloodiest battles in Iraq since the 2003 U.S.-led invasion.
"This war is not quite over, but it's being won and primarily by the people of Anbar. Al Qaeda has not been entirely defeated in Anbar, but their end is near and they know it," said Marine Maj. Gen. John Kelly, the top U.S. commander in Anbar, during the handover ceremony.
The return of security control to Iraqi authorities doesn't mean U.S. troops, who number about 25,000 in the region, will leave Anbar. The vast, mostly desert region extends from the western outskirts of Baghdad to the borders of Syria, Jordan and Saudi Arabia.
But U.S. troops will cut back on security patrols and focus on training Iraq's army and police.
President Bush hailed the turnover as a major achievement, saying the region had been "transformed and reclaimed by the Iraqi people."
"Iraqi forces will now take the lead in security operations in Anbar, with American troops moving into an overwatch role," Bush said in a statement.
For years, Anbar, the 11th of 18 provinces to switch to Iraqi control, was the center of the Sunni insurgency. The city of Fallujah became the symbol of Sunni resistance until it fell to American troops in November 2004 in the most intense urban combat of the war.
The province was the base of the shadowy al Qaeda in Iraq and its leader, Abu Musab al-Zarqawi, who used the area as a staging ground for attacks in Baghdad until he was killed in a 2006 U.S. airstrike.
Just two years ago, a Marine intelligence report concluded that al Qaeda had made such inroads that the war was "lost" in Anbar.
But later that year, some in the region's Sunni Arab community mounted a backlash against al Qaeda in Iraq. Many Iraqi tribal leaders opposed al Qaeda's brutal tactics, including mass killings of Shiite civilians and of some Sunni leaders who refused to accept al Qaeda's rule.
The disaffected Sunni sheiks organized so-called awakening councils that joined forces with U.S. troops to push al Qaeda from the province. That enabled U.S. forces to gain control of the provincial capital of Ramadi and other cities long considered killing zones.
Now Anbar is considered one of the quieter parts of Iraq. Yet bitterness remains between the awakening councils and the central Baghdad government, predominantly Shiite.
That could complicate broader political reconciliation efforts on the national level.
During Monday's ceremony, for example, the head of the local awakening council complained that the central government was not giving Sunni tribesmen enough credit for fighting al Qaeda, and placing too much attention on their past ties to Saddam Hussein.
Monday's ceremony had been postponed several times in recent months, with delays blamed on weather and a last-minute disagreement between the governor and the central government over control of security forces.
But security concerns also played a role. As recently as late June, a suicide bomber wearing a police uniform killed more than 20 people, including three Marines and several prominent pro-U.S. tribal leaders, in the town of Karmah, 20 miles west of Baghdad.
Meanwhile in Baghdad, a senior aide to Prime Minister Nouri al-Maliki said Iraq has submitted a list of proposals to tweak a draft of a U.S.-Iraqi security agreement.
The changes were submitted to the U.S. government in Baghdad, said the aide, who spoke on condition of anonymity because he was not allowed to release the information.
U.S. and Iraqi officials have said the two sides agreed tentatively to a schedule that included a broad pullout of U.S. forces by the end of 2011. But al-Maliki has suggested that his government is still not satisfied with that arrangement.