The Defence Secretary Philip Hammond made the announcement as he revealed the details of the new military basing plan on Tuesday.
By 2020, 16,000 British troops will have been brought back from Germany in a move expected to save the MoD £240m a year.
The process will make better use of the Defence estate and provide better accommodation and facilities for our troops and their families, according the Defence Secretary.
As a result of the restructuring, there will be a small reduction to the size of all regiments, including in Northern Ireland, where up to 200 posts are set to go.
The main change will see the 2nd Battalion The Mercian Regiment, currently based at Palace Barracks in Holywood move to Chester in 2014.
They will be replaced by 1st Battalion The Royal Regiment of Scotland, who are currently based in Edinburgh.
A proportionate amount of the regular army of around 2,000 service personnel will also be based in the region.
The 38th Irish Brigade Headquarters at Thiepval Barracks in Lisburn will remain unchanged.
Why has he [the Defence Secretary] turned his back on some of the investment which is already available in Northern Ireland and not decided to relocate some of the units either in Palace Barracks or Thiepval Barracks?
DUP MP Sammy Wilson
The Defence Secretary said: "We are also going to invest an additional £1.8bn in our new basing plan, providing investment around the country, crucial jobs for local economies and the best possible accommodation for our soldiers and their families.
"This work also supports and enables the Army 2020 structure, announced last year, which will ensure that the British Army remains the most capable Army in its class, adaptable and ready to meet the security challenges of the next decade and beyond."
But in the House of Commons, DUP MP Sammy Wilson expressed anger that Northern Ireland had not been used for further investment.
Mr Hammond said that the army had looked at the possibility of using vacant accommodation at the Lisburn base.
"The equation is complex, it's about utilising existing estate but it's also about the operational cost of having troops in that estate," he responded.
We look forward to the continued support from the community across Northern Ireland in support of this important and highly valued garrison.
Brigadier Rob Thomson, Commander 38 Irish Brigade.
Four UK barracks are set to close as part of the restructuring,Claro Barracks in Ripon, North Yorkshire, Howe Barracks in Canterbury, Kent, Craigiehall Barracks in Edinburgh and Cawdor Barracks in Brawdy, Pembrokeshire.
The government plans to create seven regional centres for the army at Salisbury, Wiltshire; Catterick, North Yorkshire; Aldershot, Hampshire; Edinburgh and Leuchars; Colchester, Essex; Stafford, Staffordshire; and at Cottesmore in Rutland.
Brigadier Rob Thomson, Commander 38 Irish Brigade reacted on Tuesday, he said: "The basing plans confims the future in Northern Ireland for Ballykinler, Palace, Lisburn and Aldergrove and we are looking forward to welcoming the 1st Battalion The Royal Scots and their families to what will be their new home in North Down."