The readjustment to original plan came as the US struggles to maintain stability in Afghanistan while fulfilling promises to end the war by the end of Obama presidency in January 2017.
"The security situation in Afghanistan remains precarious," Obama said.
"I strongly believe it is in our national security interest... That we give our Afghan partners the best opportunities to succeed," he added.
"The decision I'm making today ensures that my successor has a solid foundation for progress in Afghanistan, as well as the flexibility to address the threat of terrorism as it evolves," Obama said.
"I firmly believe the decision I'm announcing is the right thing to do." he said.
Obama's announcement in this regard came on the eve of his departure to Europe to attend a crucial NATO summit, wherein Afghanistan and the threat from Islamic State would be major topics of discussion.
year, the United States will maintain approximately 8,400 troops in Afghanistan into next year through the end of my administration," Obama said in a statement at the White House with US Defence Secretary Ashton Carter, Chairman of the Joint Chiefs of Staff General Joseph Dunford, by his side.
The decision comes after new commander of the US-led NATO mission in Afghanistan, General John Nicholson, conducted a review of the security situation this year.
At the height of the 14-year war, there were 100,000 troops in Afghanistan. Last month, Obama sent a report on US troop levels to Congress under the War Powers Resolution.
"In all these reviews we're guided by the facts, what's happening on the ground, to determine what's working and what needs to be changed," Obama said.
"Afghan security forces are still not as strong as they need to be. With our help, they're still working to improve critical capabilities, such as intelligence, logistics, aviation and command and control," he said.
"The Taliban remains a threat... They've continued attacks and suicide bombings, including in Kabul," he said adding that "as president and commander and chief I've made it clear that I will not allow Afghanistan to be used as safe haven for terrorists to attack our nation again."
"From coalition bases in Jalalabad and Kandahar, we'll be able to continue supporting Afghan forces on the ground and in the air and we continue supporting critical counter-terrorism operations," he said.
Obama insisted that the only way to end this conflict and to achieve a full drawdown of foreign forces from Afghanistan was through a lasting political settlement between the Afghan government and the Taliban.
"That's the only way. That is why the United States will continue to strongly support an Afghan-led reconciliation process and why we call on all countries in the region to end safe havens for militants and terrorists," he said.
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