Security forces have started dismantling the barricades surrounding Drumcree church. The operation began early yesterday morning and involved the removal of the huge concrete barriers which had been set up to block the Orangemen's path to the nationalist Garvaghy Road.
Miles of razor wire were also stripped and the barriers placed around the end of Garvaghy Road, at St John's Chapel, were removed.
About 400 British soldiers were preparing to leave Northern Ireland yesterday, while the position of another 1,300 soldiers is under review.
The RUC sub-divisional commander at Portadown, Supt Mervyn Waddell, said the removal of the barricades was "in the best interest of the whole community".
The Portadown Orange Order spokesman, Mr David Jones, described the move as a "step in the right direction."
Meanwhile an initiative under which nationalists and unionists will come together to discuss future parades and cultural events in Derry has been launched.
Indirect contacts between the Apprentice Boys and the Bogside Residents' Group already exist. The lieutenant governor of the Apprentice Boys is reported as saying that direct talks would begin next week.