US Edition At a ceremony attended by military chiefs, the Stars and Stripes fluttered over the base as the Americans took over command of the sector held by the British since the 2003 invasion.
The headquarters staff of the British division flew out of Iraq to RAF Brize Norton marking the start of the departure of all but a few hundred of the 4,100 servicemen.
Air Chief Marshal Sir Jock Stirrup, the Chief of the Defence Staff, said the occasion marked "the commitment and courage" of the Forces "over so long a period".
"It's about the effort they put in, it's about the difficulties they overcame, it's about the losses they suffered," he said.
"We remember particularly at such a time those who paid the ultimate price in this endeavour, those who suffered injury and disablement in order that we might get to this point today."
Despite much criticism from Washington over Britain's performance in Iraq, General Ray Odierno, the US commander in Iraq, praised the "outstanding accomplishments of the brave troopers of the United Kingdom".
"But for the courage and selfless dedication of all the United Kingdom forces who served in Iraq, and for the unwavering commitment of the British people in the cause of liberty around the world," he said.
The head of Basra's security forces, Major General Hawedi Mohamed, thanked Britain for its help in ridding his country of dictatorship and bringing freedom and democracy.
The ceremony opened with a piper and was followed by the Band of the Royal Marines.
After speeches, the pennant of the Britain's Combined Amphibious Forces, under Maj Gen Andy Salmon, was lowered and the pennant of Maj Gen Oates's 10th Mountain Division was raised.
Despite the handover there remain many questions over what Britain achieved in Iraq compared to the continuing success of the American "surge".
Both politicians and commanders have been criticised for failing to implement a robust counter-insurgency strategy. Similarly the British never had full control of Basra, letting it slip into the control of the insurgents and Iranians.
Col Tim Collins, who commanded an infantry battalion during the 2003 invasion, said the Army was "much older and wiser" after its experiences in Iraq.
"We need to learn from our mistakes and our successes but let's not kid ourselves and dress it up as a victory."
He said much of the failure could be attributed to British generals' "lack of aggression and obsequiousness towards the Government".
"For too long we have celebrated mediocrity and when you look at the Americans there is nothing mediocre."
Edward Davey, the Liberal Democrat shadow foreign secretary, said it would be a "huge relief" for the Forces that the end of this "disastrous conflict is at last in sight".
"Our troops' outstanding courage in Iraq has been matched only by the incompetence of the political leadership which took them there."
The security situation in Basra has improved significantly since a major Iraqi army-led operation against militias in the city this time last year known as Charge of the Knights.
British combat operations in Iraq end on May 31 and all but about 400 of the remaining UK troops will be withdrawn by July 31.