Trump, a freewheeling former businessman, brought Kelly in a year ago to restore order to his often chaotic White House, but clashed repeatedly with him in recent months.
Kelly and Trump have grown tired of each other.
Reporters clamored for an update after Axios and other news outlets cited unnamed White House sources that Kelly would step down "in the coming days" from his position.
Representatives for the White House did not be immediately respond to a request for comment on the report.
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Kelly had sought to bring more order and stability to a White House that has often been chaotic under the unpredictable Trump. Kelly is the latest high-ranking White House official known to have given information for Mueller's probe.
Reports of his pending resignation have been circling nearly since he got the job. The president often remarks on Kelly's lack of political skills and has told advisers in recent days that he needs a more political chief of staff for his reelection. Nick Ayers, the vice president's chief of staff, is expected to be his successor. He quickly took on a broader range of responsibility than Priebus had, requiring all White House staffers to answer to him.
A source explained that the men 'know that they are 17 months into what has been a very tumultuous relationship, ' adding: 'It is no longer seen as sustainable by either party'.
"Now is the best opportunity to be laser-focused on further building out the political infrastructure that will support victory for President Trump and the GOP in 2020", campaign manager Brad Parscale said in a statement.
Trouble surrounded Kelly before he began his stint as chief of staff.
Kelly has seen his status as chief of staff diminished in recent months, with the President circumventing numerous policies and protocols the retired Marine Corps general put in place when he entered the West Wing a year ago. Milley commanded troops during several tours in Iraq and Afghanistan.