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Gen Randy George was nominated for the role in 2023 by former President Joe Biden.
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Chief Pentagon spokesperson Sean Parnell said in a statement on social media that George "will be retiring from his position as the 41st Chief of Staff of the Army effective immediately".
The Army chief normally serves a four-year term. George, a career military officer who graduated from the West Point military academy, was nominated for the role in 2023 by former President Joe Biden.
The latest shakeup comes after Trump said in an address to the nation that the US-Israel war with Iran is expected to conclude "very shortly".
George served as an infantry officer in the first Gulf War and in recent conflicts in Iraq and Afghanistan. It was not immediately clear why he was being asked to leave.
"We are grateful for his service, but it was time for a leadership change in the Army," an unnamed senior defence official told CBS.
Pentagon spokesperson Parnell said: "The Department of War is grateful for General George's decades of service to our nation. We wish him well in his retirement."
He will be replaced by Army Vice Chief of Staff Gen Christopher LaNeve who will become the acting army chief of staff, according to US media.
Parnell said LaNeve is "a battle-tested leader with decades of operational experience and is completely trusted by Secretary Hegseth to carry out the vision of this administration without fault".
The US Military Academy at West Point posted photos on Wednesday of George meeting with troops, saying he "shared experience-driven guidance with cadets preparing to lead".
Since entering the Pentagon, Hegseth has fired more than a dozen senior military officers, including the Chief of Naval Operations and the Air Force's Vice Chief of Staff.
President Trump has warned Iran of strikes on bridges and electric power plants if its leaders do not agree to his terms to end the war.
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