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.
US considering 'winding down' military efforts in Iran, says Trump
President Donald Trump said on Friday the US was getting very close to meeting its objectives as it considers winding down its military efforts in the Iran war and called on countries that use the Strait of Hormuz to guard and police it "as necessary".
Iran ready to let Japanese vessels transit Hormuz, Kyodo reports
Iran is ready to let Japanese-related vessels pass through the Strait of Hormuz, a vital artery for global oil supplies, Kyodo news has reported, citing Iranian Foreign Minister Abbas Araqchi.
Israeli military says it is striking Hezbollah targets in Beirut
The Israeli military said early on Saturday it was striking Hezbollah targets in Beirut, after issuing an evacuation warning for seven neighbourhoods in the southern suburbs of the Lebanese capital.
US sending marines and amphibious assault ship to Middle East
The US military is deploying thousands of Marines to the Middle East, officials told Reuters on Friday, as President Donald Trump accused NATO allies of cowardice over their reluctance to send forces to help open the Strait of Hormuz.
Korean car parts factory fire kills 10, injures 59, 4 missing
A fire that broke out around lunchtime on Friday at a car parts factory in the South Korean city of Daejeon on Friday, has left 10 people dead, 25 seriously injured and 34 with minor injuries, the country's safety ministry said on Saturday.
