Defence officials have ordered staff to take leave for 25 days between December 14 and January 7 to say "thank you" for their service during the Olympics and Diamond Jubilee.
The extra holiday will allow buildings to be closed, cutting utility costs, and staff will have the option of working from home.
But the move has been criticised as a cost-cutting exercise by one former Army official. Richard Kemp, a former commander of UK ground forces in Afghanistan, said: "Shutting down the army for an extended period over Christmas is an act of sheer desperation by military commanders starved of cash by the Government.
"The troops themselves will welcome the extra time off. But nevertheless, to an Army at war this sends an insulting and morale-sapping message that makes it entirely clear just where spending priorities do not lie."
An Army spokesman said: "To suggest the Christmas leave plan is a cost-cutting measure is ridiculous."