The last United States troops left an air base in northern Iraq under a deal between Iraqi and US officials.
Trump, in a social media post, described the withdrawal by a September 30 deadline as "orderly".
Appearing soon after at a White House event, he spoke at length about the withdrawal and said, "It's been a long time with very bad decision making that got us involved in this quagmire in the first place. It was a quagmire. For many, many years it lasted. But soon that part of history will be over".
He said the shift was a victory for the US, Iraq and a sign of victory over the IS group.
Iraqi troops paraded in vehicles through the streets of Baghdad and the Shi'ite holy city of Najaf to mark the pullout.
The withdrawal "fills our hearts with joy," said Baghdad resident Ahmed Salah, who said he felt reborn at the age of 70.
But he also said it was now time for powerful militia groups to surrender their weapons, "and let the government be the one responsible to protect me and you on the ground, sky and water".
The withdrawal, agreed on two years ago, comes against the backdrop of the ongoing war between the United States and Iran that has also sometimes spilled over into Iraq, with Iran-backed militias firing on US troops and the US striking the groups' strongholds.
Iraq touted the end of the US mission as a sign of the country's increasing strength and sovereignty.
The withdrawal was also celebrated by Iran-aligned groups but raised concerns among some other Iraqis, particularly in the Kurdish region, where many fear a resurgence of the IS group as well as more attacks by Iran-linked groups.
Meanwhile, questions loom around the future of the Iraqi militias, which the Iraqi central government has sought to disarm, with little success so far.
Pentagon spokesman Sean Parnell said in a statement that US troops and equipment had completed an "orderly departure" from the air base in Irbil, in northern Iraq's semi-autonomous Kurdish region.
"This milestone reflects the success of a 12-year campaign that defeated ISIS as an organised military threat in Iraq and across the region," he said.
"It also marks a transition from a wartime coalition mission to an Iraqi-led security effort supported by a more normal bilateral security relationship."
Iraqi Prime Minister Ali al-Zaidi presided over the handover ceremony and described the US withdrawal as the beginning of a "new phase: one defined by Iraq's sovereignty, the strength of its institutions, the readiness of its forces, the unity of its decision-making and balanced partnerships with its friends."
Trump in his remarks on Wednesday lavished praise on al-Zaidi, calling him "outstanding," a "fantastic guy, friend of mine" and someone who "will hopefully be able to handle things very well".
US troops invaded Iraq in 2003 to topple Saddam Hussein.
They departed in 2011 but three years later, Iraqi authorities invited a smaller US-led mission to fight IS, which had rampaged across Iraq, seizing large swaths of territory.
With the extremist group reduced to scattered sleeper cells, the US and Iraq agreed in 2024 to wind the mission down.
US troops pulled out of bases in most areas of Iraq last year but maintained a small presence of hundreds of troops in the northern Kurdish region.
Bases there have regularly come under attack since the US and Israel launched their war against Iran on February 28.
Iran-backed Iraqi militias also have co-ordinated with Yemen's Houthi rebels to attack Saudi Arabia.
with Reuters
