"Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again. He is a rare talent, and I thank him for his dedicated service to the American people," Trump said in a statement.
"Will be making a decision soon on the appointment of new Chief Economic Advisor. Many people wanting the job - will choose wisely!" Trump tweeted.
Cohn's announcement came just a few days after the departure of the President's adviser and communications director Hope Hicks.
The development sounded alarm bells in establishment circles in Washington and on Wall Street, where many viewed Cohn as a steadying influence on economic policy inside the White House.
His departure, combined with Trump's recent moves to recommit himself to his nationalist trade agenda, raised questions about the direction of the Trump administration and sent Dow futures plummeting 300 points.
"Wall Street won't be happy," said a senior Republican who worked both at the White House and in finance.
Trump was likely to consider Larry Kudlow, a long time informal adviser of his, CNN quoted sources as saying.
Cohn plans to stay in his job for several weeks and continue to push back on Trump's planned tariffs on steel and aluminium imports, which have threatened to touch off a global trade war, said a person who spoke on the condition of anonymity to discuss Cohn's plans.
Trump's announcement last week that he would levy tariffs on aluminium and steel imports was the most immediate catalyst for Cohn's departure, the New York Times reported citing officials as saying.
A long time proponent of free trade, Cohn believed the decision to raise tariffs on imported steel by 25 per cent and on aluminium by 10 per cent could jeopardize economic growth.
Cohn's position with Trump had been tenuous since last summer, when the former rebuked the President over his comments about a white supremacist rally in Charlottesville, Virginia.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)