White House chief strategist Steve Bannon is the latest in a number of high-profile departures from Donald Trump's administration.
The move, which the White House said was "mutually agreed", rounds off a week of political upheaval in the US.
Bannon was a controversial, far-right aide who helped Trump win his presidential campaign last year on a nationalist agenda. He influenced Trump on key decisions including placing a ban on nationals from seven Muslim-majority countries, walking away from the Paris climate accord and tearing up international trade agreements.
I want to thank Steve Bannon for his service. He came to the campaign during my run against Crooked Hillary Clinton - it was great! Thanks S— Donald J. Trump (@realDonaldTrump) August 19, 2017
Trump has come under fire from politicians and executives around the world after comments he made following a violent white supremacist demonstration in Charlottesville, Virginia.
Earlier in the week, Trump's top business advisory groups disbanded in the midst of the growing scandal.
Critics called for Trump to fire Bannon, who has been accused of sympathising with anti-Semitic and white nationalist views, and his removal drew cheers from the stock market floor on Friday.
Newly appointed chief of staff John Kelly has been called upon to restore order to the White House by cracking down on infighting in the Republican party that's preventing the government from passing a key tax reform programme. Bannon infamously clashed with many of Trump's aides, and he mocked colleagues in an interview published in The American Prospect this week.
Bannon immediately returned to his previous position as executive chairman of the far-right website Breitbart on Friday.
He plans to continue advancing his agenda there. "The Trump presidency that we fought for, and won, is over," Bannon told The Weekly Standard.
"We still have a huge movement, and we will make something of this Trump presidency. But that presidency is over. It’ll be something else. And there’ll be all kinds of fights, and there’ll be good days and bad days, but that presidency is over.
"I've got my hands back on my weapons," he added. "I am definitely going to crush the opposition."
Billionaire investor quits as Trump advisor
It wasn't all about Bannon yesterday, though. Carl Icahn also stepped down from his role as special advisor yesterday following accusations that he profited from the policy recommendations he offered Trump.
In a letter, Icahn denied his role helped his own investments.
"I chose to end this arrangement (with your blessing) because I did not want partisan bickering about my role to in any way cloud your administration," he wrote in a letter to Trump published on his website.
Democrats had argued his guidance created a conflict of interest with his businesses, including oil refining company CVR Energy.