Describing his relationship with President Trump as "tumultuous", CNN's Kaitlan Collins on-air reports Kelly is "expected to reign in the coming days".
As ABC News has previously reported Kelly was among members of the administration and those outside advisers close to the president who have been interviewed by the special counsel, according to sources over the course of the investigation.
CNN reported on Friday that Trump had been discussing a replacement plan.
Trump's White House has had the highest turnover of senior-level staff of the past five presidents, according to figures compiled by the Brookings Institution think tank. If he's going to be replaced by someone who will just "let Trump be Trump" (to steal a line from an old West Wing episode), why have a Chief of Staff at all? Numerous storms in which Kelly became embroiled were by his own making.
Besides the internal conflicts, Kelly has also done his share of filling headlines for his own actions, from his comments about the Civil War and immigration to poor phone security (a running theme in Trump's White House) to his penchant for being captured in various poses of distress during Trump appearances.
In total, 28 people have resigned or been fired from the White House during Mr Trump's administration.
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If her appointment is confirmed she will replace Ms Haley, who had held the role since November 2016. Nauert was "under strong consideration" for the post, but he was evaluating other candidates.
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The booster continued to function after it landed in the water, going through its automated safeing process and transmitting data. The Dec. 3 mission is the largest single "rideshare" from a US -based launch vehicle to date, according to SpaceX.
When Kelly first replaced Reince Priebus as chief of staff last summer, he ruled with an iron fist. Kelly started holding increasingly fewer senior staff meetings - once daily occurrences that were whittled down to weekly gatherings - and exerted less control over who talked to the President, which was once his sticking point.
Kelly, a retired Marine Corps general, joined the administration a little over a year and half ago.
Mr Trump and Mr Ayers are working out specifics terms under which Mr Ayers would fill the role and the time commitment he will make, the official said. We'll be announcing who will be taking John's place.
The departure comes just days after reports of Kelly's questioning by Special Counsel Robert S. Mueller III as part of his probe into whether Trump obstructed justice in the Russian Federation investigation. Kelly called Porter "a man of true integrity and honor" and continued to defend him after Porter resigned.
He has expressed unhappiness with Homeland Security secretary, Kirstjen Nielsen, saying, "I would like her to be much tougher on the border (with Mexico)".
Three months earlier, he told reporters on Capitol Hill that some undocumented immigrants brought to the country as children were "too lazy" to sign up for a program protecting them from deportation.