It follows reports that President Trump was outraged by comments made by Mulvaney during the Ukraine corruption saga.
The allegations of abuse of power over the Ukraine incident led to impeachment proceedings against President Trump.
Mulvaney's departure has been on the cards for the last few weeks.
Mr Mulvaney is to become US special envoy to Northern Ireland, while North Carolina lawmaker Mark Meadows has been appointed to take over his former position.
Air traffic control issue disrupts flights at major UK airports
Flights at major British airports were disrupted on Tuesday by a technical fault at air traffic control provider NATS, the latest in a series of failures that renewed questions about the resilience of Britain's aviation infrastructure.
At least 73 injured after Houthi rebels attack Saudi civilian and energy facilities
At least 73 civilians have been injured after Yemen's Houthi rebels attacked a number of civilian and energy facilities in Saudi Arabia's southern region on Tuesday, state media confirmed.
UK, France and Canada sanction Israeli West Bank settlements
Britain, France and Canada on Tuesday moved to block imports from Israeli settlements in the occupied West Bank, as a wider group of countries signalled further steps to defend the two-state solution amid mounting concern over settlement expansion.
Suspect detained after sabotage attacks on Germany power grid
German police have detained a 48-year-old man suspected of carrying out a series of sabotage attacks on the country's electricity grid, police and prosecutors said on Tuesday.
Nepal rescue focused on workers trapped in three tunnels
Rescuers in Nepal are focusing on three hydropower project tunnels where they believe dozens of workers could be trapped, authorities said on Tuesday, two weeks after a devastating flood killed hundreds and left thousands missing.
