The US Army is reportedly planning to cut 40,000 soldiers from its ranks over the next two years.
The losses would see it reduced from its current size of around 490,000 to 450,000 by the end of the budget year in September 2017, according to US media.
That would make it the smallest it has been since just before it entered the Second World War.
It is also said to be planning a further 17,000 civilian job cuts as part of the cost-saving initiative.
A US defence official speaking to the AFP news agency confirmed the reports.
The losses, tipped to affect almost all of the Army's foreign and domestic posts, are expected to be confirmed this week.
USA Today says the cuts are revealed in a document it has obtained.
The plans have raised concerns over the country's defence capabilities.
According to USA Today, it was argued in budget documents in 2013 that going below 450,000 troops could mean the US could not win a war.
At the peak of fighting in Iraq and Afghanistan, the US Army had some 570,000 soldiers, the publication said.
The report was published just a day after US President Barack Obama said the US should step up its campaign against Islamic State in Syria and Iraq, warning that a long battle lay ahead.
He said: "This will not be quick. This is a long-term campaign. It will take time to root them out, and doing so must be the job of local forces on the ground with training and air support from our coalition."
Last month the Pentagon announced it was sending a further 450 US troops to act as advisors to Iraqi troops attempting to seize back the western city of Ramadi from IS militants.
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