The US is to axe thousands of troops as part of a far-reaching defence review aimed at coping with huge budget cuts over the next decade, officials say.
The changes - to be unveiled on Thursday - are likely to end a decades-old policy of maintaining the strength to fight two wars at once.
President Barack Obama will announce the plans with Defence Secretary Leon Panetta at the Pentagon on Thursday.
The Pentagon faces more than $450bn (£288bn) in cuts in the next 10 years.
Another $500bn in cuts could be looming at the beginning of 2013, after a congressional committee failed to act on finding budget savings last year.
Despite this Mr Obama, wary of the upcoming presidential election, is expected to emphasise that the US military budget is continuing to grow, albeit at a slower pace.
US officials have sought to portray the president as taking a deliberate approach to defence spending, insisting any troop reductions will be informed by a review of strategy by commanders.
White House spokesman Jay Carney described the planned cuts as "surgical". The president is also reported to have been closely involved in the decision-making process.
No specific cuts or troop reduction figures will be announced on Thursday, reports say, but the White House said the review "will guide our budget priorities and decisions going forward".
Reuters news agency says officials are considering a 10-15% reduction in the US Army and Marine Corps over 10 years - equivalent to tens of thousands of troops.
Future in Asia
The US is expected to make several large long-term strategic changes as a result of budget pressures, including reducing the overall number of ground troops and strengthening air and naval power in Asia.
Defence Secretary Leon Panetta made clear last autumn that Asia would be central to US security strategy, including countering China's influence in the region, describing the Pacific as a "key priority".
Backing away from a potential two-war footing has been debated in the Pentagon for years.
In June 2001, then-Defence Secretary Donald Rumsfeld told Congress the two-war strategy was "not working".
And when the US was in fact fighting two wars - in Iraq and Afghanistan - the military suffered a shortage of manpower.
The expected change in strategy would prepare the US to fight one war while waging a holding operation elsewhere to "spoil" a second threat.
Officials say they are using recent examples to guide their decisions.
"As Libya showed, you don't necessarily have to have boots on the ground all the time," an unnamed official told Reuters. "We are refining our strategy to something that is more realistic."
Yet many of the Nato allies in Libya are facing similarly tight defence budgets, and Mr Obama is likely to face criticism from defence hawks in Congress, including Republicans and those seeking to challenge him for the presidency in November.