"Cabinet has decided not to prolong the use of F-16's in the fight against IS past December 31," the Dutch cabinet said in a statement.

Four Dutch F-16s have been pounding the jihadist group in Iraq since October 2014 and operations were expanded when the planes flew their first missions into Syria in early 2016.

"The end of the military battle against IS is in sight," Prime Minister Mark Rutte said Friday.

"At the same time IS in Iraq has transformed itself into an underground organisation that primarily focuses on (terror) attacks," he told journalists during his weekly press conference.

The Dutch input in Iraq will shift from offensives against IS to strengthening safety across Iraq "in order for people to safely return home and get on with their lives", the government said.

A maximum of 50 Dutch troops will be deployed to northern Iraq to "train to keep areas safe that have been liberated from IS".

Three to a dozen Dutch special forces will stay in Baghdad to continue training Iraqi forces.

A further 20 military and civil experts will remain part of NATO's capacity-building mission in Iraq, which focuses "on the strengthening of the Iraqi security sector", the government said.