More than 130 soldiers from the Overwatch Battle Group returned to Brisbane to be greeted by family and friends after their seven-month tour in Tallil some 300 kilometres (185 miles) south of Baghdad.
Australia officially ceased operations in the area last week, fulfilling a campaign promise by Prime Minister Kevin Rudd to pull combat forces out of Iraq if elected.
Commander of the 7th Brigade, Brigadier Steven Day said the Australian force had completed its mission in the southern province.
"The Iraqi security forces started to step up to the plate in southern Iraq around about a year ago now," he told reporters in Brisbane.
"They are now confident and competent to take on the challenge of managing security in that part of the world."
Day said the Australian soldiers had served their country, and Iraq, well.
"These men went there six or seven months ago to work in southern Iraq, which is a dangerous place and it is a better place today for the six or seven months of hard toil that the boys have put in," he said.
Some 550 Australian soldiers will arrive home from Iraq by the end of this month, with a welcome home parade scheduled for June 28.
Australia will still have about 800 military personnel in Iraq and nearby countries, including a 110-strong security detachment in Baghdad and personnel for aircraft and a warship based outside Iraq.
In withdrawing the soldiers from Iraq last week, Rudd said that all of Australia's arguments for sending troops to war in Iraq had been proved wrong.
"Have further terrorist attacks been prevented? No, they have not been, as the victims of the Madrid train bombing will attest," he said.
"Has any evidence of a link between weapons of mass destruction and the former Iraqi regime and terrorists been found? No.
"Have the actions of rogue states like Iran been moderated? No... Iran's nuclear ambitions remain a fundamental challenge.
"After five years, has the humanitarian crisis in Iraq been removed? No it has not."
No Australian Defence Force troops died in combat in Iraq.