"Mick has done an outstanding job while in the Administration," Trump tweeted. "I look forward to working with him in this new capacity as we continue to MAKE AMERICA GREAT AGAIN!"
Trump added that his current chief of staff, John Kelly, will be staying until the end of the year. "He is a GREAT PATRIOT and I want to personally thank him for his service!" Trump wrote.
Trump's first pick for the job, Vice President Mike Pence's chief of staff Nick Ayers, took himself out of the running last weekend and decided to leave the White House instead. The decision caught the president and many senior staffers by surprise, and Trump soon found that others he considered front-runners were not interested in the job.
It was not immediately clear why the president decided to make Mulvaney's appointment temporary. One senior White House official said there was no time limit on the appointment and Mulvaney would fill the role of chief of staff indefinitely, regardless of the "acting" title.
Key to his selection: Mulvaney and the president get along and the president likes him personally. Additionally, Trump prized the former congressman's knowledge of Capitol Hill and political instincts as the White House prepares for a Democratic-controlled House and the president's upcoming re-election campaign.
The decision came suddenly. Trump had grown frustrated with the length of the search and the growing perception that no one of stature wanted the job, according to one person familiar with his thinking.
Mulvaney received the news before the president tweeted his announcement. They spoke face to face Friday afternoon at a meeting that was supposed to be about the budget and spoke by phone later in the evening, according to a second White House official. The officials spoke on condition of anonymity because they were not authorized to discuss the personnel matter on the record.
"This is a tremendous honor," Mulvaney tweeted. "I look forward to working with the President and the entire team. It's going to be a great 2019!"
Mulvaney, who will be Trump's third chief of staff, will now take on his third job in the administration. He is head of the Office of Management and Budget, and for a time simultaneously led the Consumer Financial Protection Bureau.
The White House originally said Russell Vought, Mulvaney's deputy, would be taking over at OMB. But press secretary Sarah Huckabee Sanders said Friday night that Mulvaney will not resign that job even though he "will spend all of his time devoted to his role as the acting Chief Of Staff for the President."
Sanders said Vought "will handle day to day operations and run OMB."
Mulvaney had signaled in recent weeks that he wasn't interested in being chief of staff, with a person close to him telling reporters that he'd made clear that he would me more interested in taking over as secretary of the Treasury or Commerce. But the White House officials disputed reports that captured the sentiment, and said the president didn't need to change Mulvaney's mind.
It was unclear why Mulvaney's appointment was announced as temporary — but that decision was made by the president, the first official said. The source added that Kelly was happy with the choice of Mulvaney and plans to stay on through the end of the year to assist with the transition.
A former tea party congressman, Mulvaney was among a faction on the hard right that pushed GOP leaders into a 2013 government shutdown confrontation by insisting on lacing a must-pass spending bill with provisions designed to cripple President Barack Obama's signature health care law.
Trump's pick generated little immediate reaction on Capitol Hill, where most of Mulvaney's allies are part of the conservative House Freedom Caucus. But his knowledge of Congress and how government works is likely to be an asset in the coming months.
The appointment of the affable, fast-talking South Carolinian came just hours after another candidate for the post, former New Jersey Gov. Chris Christie, took himself out of contention. Christie cited family reasons in a statement saying he was asking Trump to remove him from consideration. He had met with Trump on Thursday to discuss the job, according to a person familiar with the meeting who was not authorized to discuss it publicly.
Ayers, who had cited family concerns as a reason he didn't accept the post, tweeted Friday: "The right father of triplets got the job...Congratulations @MickMulvaneyOMB!" Both men are, coincidentally, fathers of triplets.
Trump's first chief of staff, Reince Priebus, served for six months before leaving in July 2017. Trump tweeted his choice of Kelly to replace him before he formally offered the retired four-star Marine general the job.
For some months, Kelly had success streamlining the decision-making process in the West Wing and curtailing access to the undisciplined president. But Trump grew weary of the restrictions and Kelly's influence waned as the two men frequently clashed.
As the search dragged on after Ayers bowed out, with no backup at the ready, the void had been filled with Trump's specialty: drama.
British journalist Piers Morgan suggested he would be a good fit in an op-ed for The Daily Mail, while former major league slugger Jose Canseco tweeted his interest to Trump. Speculation swirled around an array of Trump associates, prompting some to distance themselves from the job.
When former House Speaker Newt Gingrich visited the White House this week, he insisted it was merely to see the Christmas decorations.
The wild process was hardly a novelty for the Trump administration, which has struggled with high staff turnover and attracting top talent, but it underscored the tumult of Trump's Washington. In past administrations, chief of staff was a sought-after job, typically awarded after a careful process. Now, many view the job as a risky proposition, given Trump's propensity for disorder and his resistance to being managed.
Author Chris Whipple, an expert on chiefs of staff, had called the search process "sad to watch."
"In his first two years, Trump devalued the position by failing to empower anyone to perform the job, and now he's turned the search for a replacement into a reality show," said Whipple, author of "The Gatekeepers," a book on the subject. "The only thing more broken and dysfunctional than the White House itself seems to be the search for the new White House chief of staff."
Trump on Friday disputed that notion.
"For the record, there were MANY people who wanted to be the White House Chief of Staff. Mick M will do a GREAT job!" he tweeted.