How did Octavian reduce the size of the Roman army after the civil wars?

Following the civil wars, Octavian (later known as Augustus) significantly reduced the size of the Roman military to establish a more sustainable and manageable force. He demobilized the massive army that had existed during the conflict, reducing the number of legions from 60 at the time of the Battle of Actium to 28.12

This reduction was driven by both prudence and economic necessity, as maintaining such a large force was unsustainable. To manage the transition, Octavian utilized the wealth seized from Cleopatra to pay off his veterans and established settlements for them.12

The resulting force consisted of approximately 150,000 legionaries, supplemented by an equivalent number of auxiliaries recruited from the provinces. These troops were transformed into a professional, long-service standing army, a structure that had been absent during the Republic. To ensure the long-term financial stability of this force, Augustus established a special military treasury, the aerarium militare, in 6 CE, funded by specific taxes on Roman citizens.21