Police forces officially took control Tuesday over all security in the country, formerly called East Timor, which occupies the eastern half of the island of Timor just off the northern coast of Australia.
The country, with a population of nearly 1.1 million, is around 5,800 square miles including the islands of Atauro and Jaco as well as the exclave of Oecusse on the northwestern side of Timor.
Oecusse is surrounded by West Timor, part of the East Nusa Tenggara province of Indonesia.
Timor-Leste declared independence after its colonial ruler Portugal pulled out in 1975 but was invaded by Indonesia which laid claim to the territory and made it a province in 1976.
A 25-year struggle ensued, driven mostly by the left-leaning Revolutionary Front for an Independent East Timor -- Fretlin -- which went on to win parliamentary elections.
A U.N.-sponsored referendum in 1999 led to independence in 2002, along with a succession of U.N. peacekeeping forces to maintain stability.
"The road ahead will undoubtedly be marked by many challenges," Acting Special U.N. Representative Finn Reske-Nielsen said in a statement.
"When I first came to Timor-Leste in 1999, the country was ravaged by fighting and political upheaval and shaken by displacement and suffering. Large parts of it were burned to the ground," Reske-Nielsen said.
"It has been a privilege to follow Timor-Leste's path out of those difficult times, toward peace, stability and a brighter, safer and more prosperous future."
A major upheaval in April and May 2006 led the U.N. Security Council to set up its last special mission, the U.N. Integrated Mission in Timor-Leste.
UNMIT worked to diffuse the crisis in which up to 150,000 people took shelter in camps throughout the capital Dili and the second largest city Baucau.
Reske-Nielsen said development of the non-oil economy, especially by the private sector, will be vital for continued socio-economic development.
"Ensuring educational opportunities, youth employment, and equitable development will require continued close engagement by Timorese authorities, with the support of their international partners," he said.
"Building on the professional achievements of the police service will further strengthen its ability to meet future challenges."
The last of UNMIT's 1,600 police personnel from 41 countries pulled out in late December. "It is an emotional moment to say goodbye to them and we are hoping that they can assemble with their families after months and years on their mission in East Timor," Timor-Leste Police Deputy Commissioner Afonso de Jesus said.
"Like it or not, the Timor-Leste national police is ready to assume our responsibility."
A major contributor to security was the Australia and New Zealand-led International Stabilization Force of up to 400 military personnel that operated separately from, but supported, U.N. security forces.
Australia announced in mid November that it officially had closed the ISF.
Final withdrawal of troops and handing over buildings is expected to take until April, Australia's Defense Minister Stephen Smith said at the time.
But Australia's defense and police engagement with Timor-Leste will continue through a defense cooperation agreement with the Timorese government and Australian Federal Police support to Timor-Leste's police forces, Smith said.
Despite the U.N. pullout, there remains questions over human rights abuses by Indonesian forces during their occupation, a statement from human rights group Amnesty International said in November.
"Perpetrators of killings and other human rights abuses during the Indonesian occupation of Timor-Leste must not be allowed to go unpunished, Amnesty International said.
"The fact that the United Nations is leaving Timor-Leste doesn't let the international community off the hook," Amnesty International's Asia-Pacific Deputy Director Isabelle Arradon said.
"Delivering justice for victims of these horrendous crimes must remain a priority."
Alleged abuses include unlawful killings, enforced disappearances, rape and other crimes of sexual violence and torture.
Despite the fact many of these acts amount to crimes against humanity, to date no one is imprisoned for these acts, either in Indonesia or in Timor-Leste, the Amnesty International statement said.