The complex of palaces built by Saddam Hussein became the headquarters of the U.S. military and was home to its commanding general during the war.
From there, the highest-ranking generals sitting behind banks of telephones and video screens communicated with commanders in the field and political leaders in Washington and dictated strategy that unfolded on the streets of Iraq.
Saddam was once jailed in a walled-off enclosure on the property with guards patrolling overhead.
The palace was an intersection in the war where U.S. troops, hot and dusty after traveling across Iraq's deadly roads and highways, could relax before heading back out again.
The transfer of power is the latest move in American efforts to get all troops out of the country by the end of the month.
The Iraqi government has not yet announced plans for the complex.
The Iraqi military is already using some parts, and there is talk of turning Saddam's jail cell into a museum.