Trump said there are a number of people who would like to do this job and that this is a more glamorous position that it was a couple of years ago, appreciating her work.
Trump accepted the resignation, Axios news site reported, citing two sources familiar with the matter.
Ivanka is rumored to be a moderating influence on her father, and is said to have angered right-wingers by encouraging him to water down some of his more socially conservative proposals.
Ambassador Haley took the time to praise Advisor to the President and First Daughter Ivanka Trump, and to call Senior Advisor to the President Jared Kushner, who is also the president's son-in-law, a "hidden genius".More news: Hurricane Michael strengthens to Category 2 storm as it barrels toward Fla
"You have been very special to me", Mr Trump said, addressing the outgoing ambassador who will finish her term by the end of the year.
The announcement was news to many congressional Republicans involved in foreign policy matters, and some key USA allies did not get advance word from Haley or the White House.
Ms. Haley said she had no plans to run for President in 2020. "No indication. And no obvious roadmap", said the person close to Haley.
Haley again told the president last week that she planned on resigning, but in a rare turn of events in the nation's capital, word did not leak of her intentions before she officially submitted her resignation.More news: Bellingcat investigators say second Skripal poisoning suspect identified
"It has been an honor of a lifetime", Haley said of serving as United Nations ambassador. Haley's op-ed was headlined, "When I challenge the president, I do it directly".
Sitting beside Trump in the Oval Office, Haley said her 18-month stint at the United Nations had been "an honor of a lifetime" and said she would stay on until the end of the year.
Earlier this year, Haley, 46, told Reuters that, "Every day I feel like I put body armor on", to protect USA interests at the United Nations.
Following Swan's report, Fox News and CNN confirmed Haley's resignation. She was re-elected in 2014. It came in response to an anonymous essay in The New York Times by a senior administration official that alleged there to be a secret "resistance" effort from the right in Trump's administration and that there were internal discussions of invoking the 25th amendment to remove Trump from office. But I don't agree with the president on everything.More news: Amid Tensions Over Syria, Netanyahu & Putin Agree To Meet
She often clashed with her first boss, Secretary of State Rex Tillerson, whose aides wanted her to first clear her public remarks with Washington.