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.
Iran and US play down hopes for imminent breakthrough in war
Iran and the US played down hopes for an imminent breakthrough in efforts to end their three-month-old war on Monday, with Secretary of State Marco Rubio saying Washington will either get a good agreement or deal with the country in "another way".
Philippine rescuers racing against time a day after deadly building collapse
Philippine rescuers were racing against time on Monday in a search for possible signs of life more than 24 hours after the collapse of a building under construction in the city of Angeles, with crews carefully removing rocks and surrounding debris by hand.
Australian activists return after Gaza flotilla incident, allege Israeli abuse
Australian activists detained by Israel while on a flotilla attempting to deliver aid to Gaza have returned home, with organisers alleging abuse, assault, and beatings that left some detainees in hospital.
Trump says no rush for Iran deal, US blockade stays
US President Donald Trump said on Sunday he had told his representatives not to rush into any deal with Iran, as his administration played down hopes of an imminent breakthrough in the three-month-old war that had been raised a day earlier.
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