Hitler Agrees to Withdraw Forces from the Ardennes

While the German offensive had ground to a halt, they still controlled a dangerous salient in the Allied line.

Patton’s Third Army in the south, centered around Bastogne, would attack north, Montgomery’s forces in the north would strike south, and the two forces planned to meet at Houffalize.

The temperature during January 1945 was extremely low. Trucks had to be run every half hour or the oil in them would freeze, and weapons would freeze. The offensive went forward regardless.
Erasing the Bulge—The Allied counterattack, 26 December – 25 January

Eisenhower wanted Montgomery to go on the counter offensive on 1 January, with the aim of meeting up with Patton’s advancing Third Army and cutting off most of the attacking Germans, trapping them in a pocket. However, refusing to risk underprepared infantry in a snowstorm for a strategically unimportant area, Montgomery did not launch the attack until 3 January, by which time substantial numbers of German troops had already managed to successfully disengage, albeit with the loss of their heavy equipment.

At the start of the offensive, the two armies were separated by about 25 miles (40 km). American progress in the south was also restricted to about a kilometer a day. The majority of the German force executed a successful fighting withdrawal and escaped the battle area, although the fuel situation had become so dire that most of the German armor had to be abandoned. On 7 January 1945, Hitler agreed to withdraw forces from the Ardennes, including the SS panzer divisions, thus ending all offensive operations.

Winston Churchill, addressing the House of Commons following the Battle of the Bulge said, "This is undoubtedly the greatest American battle of the war and will, I believe, be regarded as an ever-famous American victory".