The withdrawal comes hours after the White House announced late Sunday that Turkey "will soon be moving forward with its long-planned operation into Northern Syria," in a stunning reversal of US policy on Syria.
The White House statement followed a phone call between US President Donald Trump and Erdogan, who has long threatened a unilateral offensive in north-eastern Syria. The two will meet in Washington in the first week of November, Erdogan said.
"Despite our efforts to avoid any military escalation with Turkey ... the US forces have not fulfilled their obligations and withdrew their forces from the border areas with Turkey, and Turkey is now preparing an invasion of northern and eastern Syria," the Syrian Democratic Forces (SDF) said in a statement.
Washington had relied on the SDF as the most effective group in fighting Islamic State in Syria.
The SDF said it lost 11,000 of its forces over five years as it battled Islamic State.
"US forces on the ground showed us that this is not how they value friendship&alliance," SDF spokesman Mustafa Bali tweeted. "However, the decision by the @POTUS [Donald Trump] is about to ruin the trust and cooperation between the SDF and US built during the fight against ISIS. Alliances are built on mutual trust."
The Syrian Observatory for Human Rights, a Britain-based war monitor, said US coalition forces withdrew at dawn from Ras al-Ain and the strategic Syrian town of Tal Abyad, located in northern al-Raqqa province near the Turkish border, warning of the beginning of an "all-out war."
"[The Turkish offensive] will have a significant negative impact on our war against [Islamic State] and will destroy all the stability achieved over the past years," SDF's general command said.
The White House made clear that US armed forces "will not support or be involved" in the Turkish operation, and its troops would "no longer be in the immediate area."
It also said Turkey will be responsible for all captured Islamic State fighters in the area, after France, Germany and other European countries "refused" to take back the militants who come from their nations.
"The United States will not hold them for what could be many years and great cost to the United States taxpayer," the White House said.
The observatory estimates the SDF has captured 10,000 Islamic State fighters of Syrian and various other nationalities.
The SDF said that Islamic State leaders are still hiding out in the region and their cells will break out 12,000 of their militants from prisons and free their families being held in camps.
But Erdogan insisted the number of captured militants was a bit exaggerated.
Al-Hol camp, 45 kilometres east of the city of al-Hasakah, is one of the largest camps in northern and eastern Syria.
The UN Office for the Coordination of Humanitarian Affairs (OCHA) has said the al-Hol camp population is close to 70,000, most of them families of Islamic State fighters.
Trump's initial decision - announced on Twitter - in December to withdraw from Syria, without consultations with the military, eventually led to the resignation of defence secretary Jim Mattis and Brett McGurk, the special presidential envoy for the global coalition to counter Islamic State.
Trump "makes impulsive decisions with no knowledge or deliberation. He sends military personnel into harm's way with no backing. He blusters and then leaves our allies exposed when adversaries call his bluff or he confronts a hard phone call," McGurk tweeted.
He said the White House statement "demonstrates a complete lack of understanding of anything happening on the ground," adding that the Islamic State detainees are being held by the SDF, "which Trump just served up to Turkey."
Ankara and Washington agreed in August to create a "safe zone" along the Syrian border. Turkey wanted US-backed Syrian Kurdish militias pushed back and Erdogan said 2 million Syrian refugees can be settled there.
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