Allawi said, "As a result of this achievement, the vast majority of such forces will enter either civilian life or one of the state security services, such as the Iraqi Armed Forces, the Iraqi Police Service, or the Internal Security Services of the Kurdish Regional Government."
The militias, which had previously been waging a bitter struggle against former Iraqi leader Saddam Hussein, include the 75,000-strong Kurdish peshmerga and the 15,000-member Badr Organization, the military arm of the Supreme Council for the Islamic Revolution in Iraq, a Shiite party.
Missing from the deal were al-Sadr and his some 10,000 fighters, who have been engaged in an uprising against U.S.-led coalition forces for the past two months.
"As of now, all armed forces outside of state control, as provided by this order, are illegal," Allawi said. "Those that have chosen violence and lawlessness over transition and reintegration will be dealt with harshly."
About $200 million has been set aside for training, educating and providing pensions to the former militiamen, most of whom will be joining Iraq security forces or private security firms.
"To reward former resistance fighters for their service, opportunities have been created for them to join state security services or lay down their arms and enter civilian life," Allawi said.
The announcement comes after scattered violence throughout the country. A mosque in Kufa used to store ammunition for al-Sadr's fighters was rocked by explosions Monday afternoon after an American attack ignited some of the ammunition. At least two people were killed and ten others were injured in the blast, which damaged the mosque and sparked a fire that took over two hours to extinguish.
Two suicide car bombings killed eight Iraqis near a police station in Taji. A group led by Islamic militant Abu Musab al-Zarqawi claimed responsibility for the attack.
And a mortar attack Sunday evening on a U.S. base near Baghdad killed one soldier and wounded another.