The prime minister revealed the existence of 50,000 fictitious names" in the military, said a statement from Abadi's office on Sunday after a session of parliament, SIA reports citing to Aljazeera.
A parliament statement said the premier scrapped the 50,000 jobs, equivalent to almost four full army divisions.
Abadi's spokesperson Rafid Jaboori said that the investigation started with a thorough headcount during the latest salary payment process.
"There are two kinds of 'fadhaiyin'," one experienced officer in the security forces said, using a word which, literally translated, means "space men", and refers to the fictitious soldiers crowding the payroll.
"The first kind: each officer is allowed, for example, five guards. He'll keep two, send three home and pocket their salary or an agreed percentage," he told the AFP news agency.
"Then the second and bigger group is at the brigade level. A brigade commander usually has 30, 40 or more soldiers who stay at home or don't exist," the officer said.