Government and military leaders agreed in principle to the transfer of responsibility for the fighters, beginning with 54,000 members in the Baghdad province, reported KUNA, the Kuwait News Agency.
U.S. Maj. Gen. Jeffery Hammond said Iraq will begin paying salaries -- about $15 million a month -- of the Awakening fighters in Baghdad on Nov. 10, KUNA said.
U.S. officials said as many as 95 percent of the members of the Awakening -- also called Sons of Iraq -- were involved in al-Qaida and many fought against U.S. troops, giving the Iraqi militia insight into enemy operations and thought processes, The Times of London reported.
Transfer of the remaining forces in Sunni areas of central, western and north-central Iraq will be handled gradually, U.S. and Iraqi officials said.
Senior U.S. military sources told the British newspaper that said the United States would pay the salaries of any Awakenings members who did not find alternative employment.
"It is a cheap price to pay in the interests of peace in Iraq," one officer said.