The so-called Serval offensive kicked off in January last year when French troops came to the help of Malian soldiers to stop Al-Qaeda-linked militants and Tuareg rebels from descending south of its former colony and advancing on the capital Bamako.
President Francois Hollande, speaking on the eve of France's Bastille Day military parade in Paris, said the mission had been "perfectly accomplished".
"As Serval wraps up, Mali is no longer a sanctuary for terrorist groups," he said.
The French-led Serval operation, which saw eight soldiers die in 18 months, has largely been deemed a success by the international community.
Also Read
But French lawmakers warned last week that all was not over in Mali, pointing to ongoing tensions and challenges in passing the baton to another force while a planned UN stabilisation operation in the country is only being slowly deployed.
The new operation there would "make sure there is no upsurge (in terrorism) as there are still major risks that jihadists will develop in the zone stretching from the Horn of Africa to Guinea-Bissau," Le Drian said in a televised interview.
The new "counter-terrorism" operation, codenamed Barkhan, will kick off in the coming days and is being implemented in partnership with five countries -- Mauritania, Mali, Burkina Faso, Niger and Chad -- Le Drian said.