Canada will cease air strikes against ISIS by the end of this month but will triple its troops in Iraq to train Kurdish forces fighting the Islamic terror group.
Prime Minister Justin Trudeau said that Canada will withdraw six CF-18 fighter jets by 22 February, but will retain two surveillance planes.
Canadian Armed Forces members in the coalition mission will be increased from 600 to around 830, while the current 69 ground training troops will be tripled.
The country will spend more than C$1.6bn over three years towards improving security, and providing humanitarian aid to the region.
Out of the total funds, C$264m will be utilised to extend the military mission in Iraq and Syria until March 31, 2017, $145m in non-military security efforts, $840m in humanitarian assistance, and $270m to strengthen the forces in Jordan and Lebanon.
Trudeau was quoted by The Guardian as saying: "I'm proud of the mission we've put forward.
"It's complete, it's robust.
"We will be supporting and empowering local forces to take their fight directly to ISIS, so that kilometre by kilometre, they can reclaim their homes, their land and their future."
The decision to stop air strikes is part of the poll promises made last year by Trudeau, who became the prime minister in November.
Trudeau's move is being criticised by the opposition, and is said to be against the public opinion.
Conservative opposition leader Rona Ambrose said: "This prime minister is taking a shameful step backward from our proud traditions by pulling our CF-18s and Canada out of a combat role against the greatest terror threat in the world."
Image: Canada will triple its ground training troops in Iraq. Photo: courtesy of National Defence and the Canadian Armed Forces.