British military personnel will continue to carry out noncombat roles, including the training of the Afghan army and supporting NATO operations in Kabul, Michael Fallon said.
He said the decision follows a review of Britain's commitment "in light of the performance" of Afghan security forces and the overall security situation in Afghanistan. The soldiers were due to leave the country by the end of this year.
"The UK government recognised it would take time for the Afghan National Defence and Security Forces to develop into a fully-fledged fighting force capable of providing complete security for the people of Afghanistan," Fallon said in a statement.
Obama said security in Afghanistan remains fragile and could deteriorate in some places.
Britain, a partner in the US-led coalition that fought the Taliban in Afghanistan following the September 11, 2001, attacks, formally ended its 13-year campaign in October 2014 though it kept several hundred soldiers there in advisory roles.
Almost 150,000 Britons served in the conflict, and 456 died.
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