Kelly, a retired Marine Corps four-star general, was tapped by Trump in August 2017 to try to normalize a White House that had been riven by infighting.
"A chief of staff for Donald Trump is a factotum and will have virtually no influence", explained Schwartz who knows Trump intimately from his time spent with him on the book they co-authored. Vice President Mike Pence's chief of staff, Nick Ayers, is a possible contender, the source said.
The president told one of his associates on Thursday night: 'Stop calling John [Kelly] for anything.
"He's a great guy", the president said.
Speaking with reporters on the South Lawn, Trump said Kelly would be "leaving at the end of the year". The relationship seems to have frayed beyond fix.
Kelly was reportedly questioned about the obstruction of justice arm of the special counsel's investigation, which CNN reported Thursday was first launched by former Deputy Director of the FBI Andrew McCabe shortly after his boss, James Comey, was fired.
Kelly has had a tougher relationship with Trump than his predecessor did and instituted more restrictions around who could reach the president. Weeks after taking over for Priebus, his predecessor who was unceremoniously fired over Twitter while he sat on a rainy tarmac, Kelly was faced with Trump's controversial response to the racially charged protests in Charlottesville, Virginia.
All of the people asked not to be identified discussing a sensitive internal White House matter.
Washington has been abuzz with rumors about Kelly's job status at various moments during his 16-month tenure. John Kelly will be leaving at the end of the year.
Both the attorney general and United Nations ambassador positions require Senate confirmation.
This breaking news story is being updated and more details will be published shortly.
"Sure, Trump says he wants him gone, and Kelly swears and leaves and says he's not coming back".