We study a method by which realistic nucleon-nucleon potentials V_NN can bereduced, in a physically equivalent way, to an effective low-momentum potentialV-low-k confined within a cut-off momentum k-cut. Our effective potential isobtained using the folded-diagram method of Kuo, Lee and Ratcliff, and it isshown to preserve the half-on-shell T-matrix. Both the Andreozzi-Lee-Suzuki andthe Andreozzi-Krenciglowa-Kuo iteration methods have been employed in carryingout the reduction. Calculations have been performed for the Bonn A and Paris NNpotentials, using various choices for k-cut such as 2 fm-1. The deuteronbinding energy, low-energy NN phase shifts, and the low-momentum half-on-shellT-matrix given by V_NN are all accurately reproduced by V-low-k. Possibleapplications of V-low-k directly to nuclear matter and nuclear structurecalculations are discussed.