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.
At least eight die, 18 missing after ferry capsizes off North Cyprus
At least eight people died and 18 were missing after a ferry carrying around 270 passengers and crew capsized off north Cyprus on Sunday, leaving survivors clinging to its overturned hull.
Rescuers battle floods and debris as Himalayan disaster death toll nears 800
Rescuers in Nepal and China raced on Sunday to find thousands of people missing after a glacier collapse unleashed a catastrophic mudslide across the Himalayas, as they faced challenging weather conditions and rising water levels.
Manhunt underway after woman killed, several injured at Swiss shooting
A 22-year-old woman has been killed and five people injured, one seriously, in a shooting overnight at a rave in the Swiss town of Aarau which local police said could have been an act of terrorism.
Israeli strike kills two Palestinians, Gaza medics say
An Israeli airstrike near a bakery in Deir Al-Balah killed two Palestinians, including a three-year-old child, and wounded several others on Sunday, health officials said.
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