In a move which infuriated unionists, the Army's General Officer Commanding in Northern Ireland, Lieutenant General Sir Redmond Watt, confirmed there would be no military requirement for the battalions in the province.
The move was announced on the back of an IRA declaration last Thursday that it was ending its armed campaign and completing its scheme to decommission weapons.
Lt Gen Watt explained: "The Royal Irish Regiment (Home Service) and their predecessors, the Ulster Defence Regiment, have played a crucial role in creating the enabling environment for normalisation to begin.
"Once the Police Service of Northern Ireland no longer needs routine military support, the three Home Service battalions will have successfully completed the task for which they were raised.
"The programme being published today will see Operation Banner end by August 1, 2007, assuming an enabling environment is maintained.
"With the eventual end of Operation Banner, there will be no military requirement for the Home Service battalions and, at that point, they will disband.
"I have today reassured members of the Regiment that, in considering how to handle this difficult period of transition, the Government is committed to treating fairly and with dignity those who have given so much."
Lt Gen Watt said the 1st Battalion of the RIR and the Royal Irish element of the Territorial Army would continue the traditions of the regiment.
The home-based battalions - 2nd, 3rd and 4th (Home Service Battalions) have approximately 3,000 soldiers based in Northern Ireland. Many of them serve part-time.
The Ulster Unionist Assembly member David Burnside was disgusted by the announcement.
The South Antrim MLA, a former member of the Ulster Defence Regiment, called on his party and the Democratic Unionists to make it clear to the British Government that they would have nothing to do with what had become a process to appease republicans.
"This is another betrayal to be added on to the destruction of the Royal Ulster Constabulary," he said.
"Without even evidence of the ending of the IRA's statement, which amounts to just promises, the Government has gone ahead with more concessions.
"There is not even an attempt to retain the RIR within the garrison in Northern Ireland.
"I am, therefore, calling on my own party and the DUP, which now leads unionism, to indicate to the British Government that we want no further part in this appeasement process which is masquerading as a peace process.
"But I have to ask what are the leaders of the DUP doing about this? We were told there would be no more concessions when they were the leading voice in unionism."
Mr Burnside also queried the wisdom of taking away localised back-up military support even in a time of peace in Northern Ireland.
He argued: "The IRA has traditionally called ceasefires and then resumed violence, so it is foolish in the extreme to get rid of the Home Service battalions of the RIR."
The Democratic Unionist MP Jeffrey Donaldson said the announcement on the Royal Irish Regiment had come as a bombshell to his party.
The Lagan Valley MP said: "I am absolutely devastated by this. I think the Secretary of State under-estimates entirely the anger this decision will generate within the unionist community.
"It will have serious consequences for political unionism and the extent to which we can participate and co-operate with a Government which won't even consult with us on such decisions.
"When we know nothing about these decisions, when we learn of them through the media and politicians aren't informed about them, what does the Government expect?"
Mr Donaldson, who quit the Ulster Unionists in 2004 after years of opposing party policy, blamed the decision to axe the Home Service Battalions on the 2003 Joint Declaration negotiated when David Trimble was in charge of the UUP.
"When I was in the Ulster Unionist Party, I warned then that one of the consequences of the Joint Declaration would be the disbandment of the Royal Irish Regiment," he said.
"I was laughed at by the then UUP leader David Trimble, who went to (former Defence Minister) Geoff Hoon and got an assurance that there were no such plans.
"I said it was not worth the paper it was written on and I was howled down by David Trimble and his supporters. Now we see the outworking of the Joint Declaration."Reuse content