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.
Putin to talk of war and peace at marathon news conference
Russian President Vladimir Putin is likely to send a signal to the United States and European powers on Friday over his appetite for peace or more war in Ukraine when he speaks at a marathon end-of-year news conference.
Bangladesh rocked by unrest after death of student leader
Police and paramilitary troops fanned out across Dhaka and other cities in Bangladesh on Friday after violent protests overnight over the death of a popular youth leader, with concerns of further unrest ahead of national elections in which he was due to run.
Suspected gunman in Brown University shooting found dead
The suspect in the mass shooting at Brown University last weekend is dead, a US attorney said, as authorities investigate whether the same person killed a Massachusetts Institute of Technology professor two days after the rampage at Brown.
No evidence alleged Bondi gunmen received military training in Philippines
There is no evidence indicating that the two suspects involved in the Bondi Beach attack received any form of military training while in the Philippines, the country's National Security Adviser said on Wednesday.
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