The news blindsided many congressional Republicans involved in foreign policy matters and some key US allies.
The president left open the possibility of Haley returning to the administration, saying she would be welcome in any capacity. In her resignation announcement, Haley praised Ivanka and her husband Jared Kushner for their efforts behind the scenes. She also moved quickly to squelch speculation about her political ambitions.
The president said she "has been very special to me, she has done an incredible job, she is a fantastic person, very importantly, but she is also somebody that gets it".
White House spokeswoman Sarah Sanders said the two would meet in the Oval Office with news media present.
Haley's departure marked one of the rare examples of a senior Trump administration official making a graceful exit.
She backed Trump's efforts to cut off funds for the United Nations organization that aids Palestinians and joined in his attacks on Iran.
White House officials had sought to put a hold on record-setting administration turnover in the run-up to the November 6 elections, with aides being asked months ago to step down or commit to stay through Election Day to avoid adding to a sense of turmoil.
Haley, 46, is the latest in a long line of high-profile departures from the administration, such as former Secretary of State Rex Tillerson, who was sacked in March, and Steve Bannon, Trump's chief strategist, who left in August 2017. ".I can speak for Secretary of State Mike Pompeo".
Haley is one of the more popular figures in the Trump administration.
Trump suggested that Haley may come back to his administration in a different role after her break. He insisted later that the delegates were laughing with him, not at him.
President Donald Trump has accepted her resignation, United States media reported. But she also hinted at her disagreements with the president, saying she had a "personal conversation" with Trump about his response to white supremacist violence in Charlottesville, Virginia past year. Trump offered effusive praise for his envoy to the United Nations. The New York Times noted Trump's nomination of her to the United Nations post was an olive branch of sorts to the Republican establishment after the bruising 2016 cycle.
"She's made it a very glamorous position", Mr Trump said. We spoke out resolutely against dictatorships in Iran, Syria, Venezuela, Cuba, and yes, Russia.
He said he'll announce a replacement for Haley within the next two to three weeks.
Born in Bamberg, South Carolina, Nikki Haley, born Nimrata Randhawa, is the daughter of Sikh parents Ajit Singh Randhawa and Raj Kaur Randhawa, both highly educated academics who immigrated to Canada from Amritsar before eventually moving to South Carolina.
Nikki Haley has resigned as the USA ambassador to the United Nations, according to multiple media reports.
As South Carolina governor, she was outspoken in her criticism of Trump during the 2016 campaign - a stance that effectively disqualified other candidates for top administration positions.
Haley is a former SC governor who is speculated to have aspirations for higher office.