"By the end of next year, America's war in Afghanistan will be over," Obama announced in a radio address to the nation, after meeting with his Afghan counterpart Hamid Karzai.
The American president said NATO forces would have a "very limited" role in Afghanistan after 2014, raising prospects of an accelerated US withdrawal from the war-torn nation.
"Afghan forces will take the lead for security across the entire country, and our troops will shift to a support role," Obama said, outlining that in the coming months, he would announce the next phase of drawdown.
The meeting between Obama and Karzai, who have often been at odds in recent years, brought into sharp focus the American end game for its longest war.
Both the leaders also threw their support behind the Afghan reconciliation efforts with Taliban and endorsed the establishment of a Taliban political mission in Qatar, to keep the door open for inter-Afghan talks.
Referring to withdrawal of the most of the 60,000 US troops in Afghanistan, Obama said that after 2014, American forces would have a "very limited" mission in training Afghan forces and preventing a return of Al-Qaeda.