CNN reported Friday morning that Kelly could be stepping down in a matter of days, but Trump did not pause long enough to take questions from reporters, though he teased he would make another big personnel announcement Saturday at the Army-Navy game in Philadelphia.
"John Kelly will be leaving - I don't know if I can say "retiring", Trump said.
"He's a great guy", the president said. Just weeks after Kelly arrived, Trump told reporters that both sides were responsible for the violence in Charlottesville, triggered by marches led by white supremacist groups.
There have been persistent reports for several days that Mr Kelly was under pressure to leave. Potential replacements include Vice President Mike Pence's chief of staff, Nick Ayers, who is still seen as a leading contender.
"I appreciate his service very much", Trump said. The lights were off in his West Wing office. Kelly is Trump's second chief of staff.
A replacement would be named "over the next day or two", Mr Trump added.
Some reports said that the retired Marine Corps general's relationship with Mr Trump had deteriorated.
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The tweets have received a huge amount of backlash, with more than 20,000 people replying, mostly criticising the organisation. They are urging people , for example, to use phrases like "bringing home the bagels" instead of 'bringing home the bacon'.
Milley, a four-star general who has served in Iraq and Afghanistan, would replace General Joseph Dunford as the military's next chairman of the Joint Chiefs of Staff. Rumors of Kelly's departure have been circulating since last month's midterm elections. The president - as freewheeling as Kelly is methodical - privately fumed that he believed his chief was hiding things from him, and frequently upbraided him in the West Wing on matters large and small. We'll be announcing who will be taking John's place.
As CNN noted, the fact of Kelly's late entry to the White House - he joined in July 2017 - shows the expansive nature of the investigation.
Trouble surrounded Kelly before he began his stint as chief of staff.
Kelly's tenure working for Trump was marked by controversies, and officials were often amazed at how he managed to survive.
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.
But perhaps most damaging was his handling of the situation involving former White House staff secretary Rob Porter, who was accused by two of his ex-wives of abuse.