U.S. Defense Secretary Chuck Hagel on Wednesday warned of dire consequences for the world's strongest military in the next decade under the automatic budget cuts known as sequestration.

The massive budget cuts -- 500 billion dollars over the next 10 years -- will force the Pentagon to choose between a decade-long "modernization holiday" and a much smaller force, Hagel told a press briefing.

The cuts mean that to preserve the U.S. technological edge in weapons, the Army would shrink to as few as 380,000 soldiers and the Marine Corps to 150,000 members, historic lows for the force level of both military branches.

For the navy, the number of carrier strike groups could be dropped from today's 11 to "eight or nine," he said. And the Air Force would be forced to retire some of its older bomber aircraft.

"The basic trade-off is between capacity --measured in the number of Army brigades, Navy ships. Air Force squadrons and Marine battalions --and capability, our ability to modernize weapons systems to maintain our military's technological edge," Hagel told Pentagon reporters.

The pay and benefits for military personnel could also take a direct hit with smaller pay raises, reduced housing allowances, and fewer health benefits.

Hagel made the grim forecast based on a strategic review he launched in March after taking over as Pentagon chief.

He said the bleak prospect offer a window on the future if Washington fails to reach a budget deal and lift the automatic spending cuts required by the law.

"This strategic choice would result in a force that would be technologically dominant, but would be much smaller and able to go fewer places and do fewer things, especially if crises occurred at the same time in different regions of the world," Hagel said.

The Pentagon currently plans to reduce the Army to about 490,000 soldiers, and Marine Corps to 182,000.

If the Pentagon chooses to keep the troops and follow the budget cuts, it would have fewer cutting-edge weapons, resulting in the loss of technological advantage, Hagel warned. "Cuts on this scale would, in effect, be a decade-long modernization holiday."

"The military could find its equipment and weapons systems -- many of which are already near the end of their service lives -- less effective against more technologically advanced adversaries," he warned.

Under the sequestration, the Pentagon is facing continued cuts of at least 50 billion dollars annually through 2023. Congress could act to reverse the mechanism if it agrees on programs to cut to make up for the automatic trimming.

Hagel's words came the day before two top Pentagon officials, Deputy Secretary of Defense Ashton Carter and Vice Chairman of the Joint Chiefs of Staff James Winnefeld are scheduled to testify on the Capitol Hill about the strategic review on Thursday.

Winnefeld said Wednesday that final decisions about Pentagon spending policy would be developed during the annual budget process later this year.