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.
Thousands of Australians without power as cyclone Alfred hits
Hundreds of thousands of people in Australia's Queensland state were without power on Sunday after Alfred, a downgraded tropical cyclone, brought damaging winds and heavy rains, sparking flood warnings.
Israeli airstrike kills two in southern Gaza
An Israeli airstrike killed two Palestinians in Rafah in the southern Gaza Strip on Saturday, medical sources said, as mediators pushed ahead with talks to extend a shaky 42-day ceasefire agreed in January between Israel and Hamas.
12 people injured in Toronto pub shooting
Toronto Police said early on Saturday they were searching for three male suspects in a shooting that injured at least 12 people at a pub in the Canadian city.
Cyclone Alfred downgraded as millions stay indoors
Ex-tropical cyclone Alfred lingered off the south-east Australian coast on Saturday and forecasters said Brisbane is likely to miss the worst of the storm, a relief for millions of residents in the region who have been staying indoors.
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