Mr Gates told a Pentagon press conference that the move was a "difficult but necessary" interim measure needed to allow the US to maintain sufficient troop levels, particularly in Iraq, where president George Bush ordered the American military to boost its presence in January.
The new policy, which applies only to serving army personnel and not to the US national guard or marine corps, also affects US troops posted in other regions including the Horn of Africa.
Announcing the change, the US defence secretary admitted that the extension of duty was recognition that American forces were "stretched".
"There's no question about that," Mr Gates said.
Mr Gates presented the policy as a means of providing greater predictability for serving US troops about their deployments and ensuring that they received a full year at home on leave following a period of active service.
In the past some US soldiers have been deployed earlier than desirable in a bid to maintain existing troop levels, while certain individual units have also had their tours of duty extended.
Explaining his decision, Mr Gates said: "In the end, I believe this new approach will allow the army to better support the war effort while providing a more predictable and dependable deployment schedule for our soldiers and their families."
However the Democrats, who have been pressing America's Republican administration to set a timetable for the withdrawal of troops from Iraq, claimed that the new policy would put further pressure on the military.
"This new policy will be an additional burden to an already overstretched army," said Democrat Ike Skelton, chair of the armed services committee in the House of Representatives.
Meanwhile, amid fears that the US army is being overstretched, Nato allies with forces in Afghanistan are meeting in Canada today to discuss how troop shortfalls can be addressed.
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