Brown made the announcement, and praised the military's accomplishments, at his office in London after a meeting with Iraqi Prime Minister Nouri al-Maliki.
"Today marks the closing chapter of the combat mission in Iraq," Brown said, quoted the Associated Press. "The flag of 20 Armoured Brigade will be lowered as British combat patrols in Basra come to an end and our armed forces prepare to draw down."
Most of Britain's 3,700 troops will leave Iraq by the end of May, but about 400 British military personnel are expected to stay to train Iraqi naval forces.
Since the 2003 U.S.-led invasion, 179 British service personnel have been killed in Iraq.
Al-Maliki and other Iraqi ministers, including oil Minister Hussain al-Shahristani, were in London to attend an investment conference with about 250 companies, including Royal Dutch Shell PLC and Rolls Royce, according to the AP.
Iraq produces nearly 2 million barrels of oil a day and sits on the world's third-largest proven reserves.
"We hope to sign an agreement with the Iraqi government about the future role that we can play in training and in protecting the oil supplies of Iraq and that will be an agreement between our two governments rather than any new United Nations resolution," Brown told a news conference, Reuters reported.
He said he believed the proposed agreement would go to the Iraqi parliament in the next few weeks.
Meanwhile, large-scale attacks in Iraq over the past two weeks have raised concerns of a return to sectarian bloodshed. On Wednesday, twin car bombings in a crowded Baghdad market in a heavily Shiite Muslim area killed more than 50 people.
The country's main Sunni political party, the Iraqi Islamic Party, condemned the attack.
"The bloody hands want Iraqis to feel fear," the party said in a statement, quoted Reuters. "These explosions in Sadr City are part of a big conspiracy by Iraq's enemies. We call on all political groups and the Iraqi government, and especially the security forces, to quell this sedition."
U.S. President Barack Obama addressed the issue of violence in Iraq at Wednesday evening's televised news conference, saying although there has been a recent string of massive attacks in the country, the overall level of violence is still lower than the same time last year.
"Although you've seen some spectacular bombings in Iraq that are a legitimate cause of concern civilian deaths, incidents of bombings, et cetera, remain very low relative to what was going on last year," the president said. "And so you haven't seen the kinds of huge spikes that you were seeing for a time. The political system is holding and functioning in Iraq."