Pentagon spokesperson Sean Parnell said the decision owed to the success of the mission.
"Thanks to our troops who stepped up to answer the call, the lawlessness in Los Angeles is subsiding," Parnell said in a statement.
"As such, the Secretary has ordered the release of 2000 California National Guardsmen from the federal protection mission."
Trump deployed the California National Guard troops to Los Angeles in June, against the wishes of Democratic Governor Gavin Newsom, to quell protests triggered by immigration raids on workplaces by Immigration and Customs Enforcement (ICE) agents.
He also sent about 700 Marines.
Despite legal challenges, a US appeals court let Trump retain control of California's National Guard.
But his decision to send troops into Los Angeles prompted a national debate about the use of the military on US soil and inflamed political tension in the country's second-most-populous city.
The Pentagon has defended the deployment, saying safeguarding ICE agents ensures they can do their jobs.
Even after the withdrawal of those military personnel from Los Angeles, 2000 National Guard troops would remain in the city along with the roughly 700 Marines.
