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.
Britain pushes allies to boost Ukraine support as Zelenskyy lands in London
Britain on Friday urged fellow allies of Ukraine to reach a deal to use frozen Russian assets to strengthen its hand for any future peace talks, as President Volodymyr Zelenskyy arrived in London for talks with those allies.
Erdogan says US, others must press Israel to abide by Gaza ceasefire
Turkish President Tayyip Erdogan said the United States and others must do more to push Israel to stop violating the Gaza ceasefire agreement, including the possible use of sanctions or halting arms sales.
EU vows financial backing for Kyiv
European Union leaders agreed on Thursday to meet Ukraine's "pressing financial needs" for the next two years but stopped short of endorsing a plan to use frozen Russian assets to fund a giant loan to Kyiv due to concerns raised by Belgium.
Tourists gawk and recoil at Trump's destruction of the White House East Wing
With many Washington tourist spots closed due to the US government shutdown, some visitors instead are checking out an unexpected and divisive new attraction in the nation's capital: President Donald Trump's surprise demolition of the White House's East Wing.
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