The president announced the appointment Friday afternoon on Twitter.
Mulvaney, 51, was on a shortlist with Rep. Mark Meadows (R-N.C.) and at least three other candidates after Trump told reporters on Dec. 8 that Kelly would leave his post by the end of the year.
Nick Ayers, chief of staff to Vice President Mike Pence, was seen as the favorite to replace Kelly but was out of the running after he could not reach an agreement with the president on his length of service, according to White House officials.
A fiscally and ideologically conservative former South Carolina congressman, Mulvaney was first elected to the U.S. House in 2010 as a tea party candidate. Along with running the OMB, Mulvaney had also served as acting director of the Consumer Financial Protection Bureau before a new director was sworn in Monday.
Mulvaney reportedly showed little initial interest in becoming the president’s chief of staff. The OMB chief had said he would prefer to become commerce or treasury secretary if that was where Trump wanted him, according to a person close to him who spoke with The Associated Press on condition of anonymity.
But on Friday he called it a “tremendous honor” to be appointed acting chief of staff by the president.
“It’s going to be a great 2019!” Mulvaney tweeted.
“I’ve told the President that now is not the right time for me or my family to undertake this serious assignment,” Christie said in a statement, according to New York Times reporter Maggie Haberman, a day after meeting with Trump to discuss the possibility of taking the job.