He calls Kelly "a great guy". He replaced Reince Priebus, who had held the job for six months.
The White House senior staff meeting Friday morning was canceled, according to three officials. Kelly is Trump's second chief of staff.
CNN reported on Friday that Trump had been discussing a replacement plan.
Earlier on Saturday, he announced army General Mark Milley as his pick to be the new chairman of the joint chiefs of staff.
The announcement comes just days after Trump announced new appointees for the position of attorney general and ambassador to the United Nations.
Top Huawei executive detained in Canada, angering China
Over the weekend, Trump met with his Chinese counterpart, Xi Jinping, and they agreed to work toward resolving tensions . China's embassy said late on Wednesday that it firmly opposed what it called an unjustified arrest.
But after the midterm elections in November, Trump said "let's see what happens", about Kelly's future at the White House, during an interview on "Fox News Sunday". He curbed Oval Office access, blocked certain outsiders from being able to call the White House switchboard and executed authority over staffing.
The president previously said Kelly would stay through 2020 to assist in his re-election bid, but his possible resignation has been rumored for months amid signs of increased tensions.
White House officials believed Kelly was close to resigning after he got into a heated argument that turned into a shouting match with national security adviser John Bolton in October. The moves had always been planned, but will give Kelly's eventual successor room to build their own political team. An unfettered Trump installed him in place of the ousted Jeff Sessions less than 24 hours after the polls closed on November 6 in the first move of an expected overhaul of Cabinet secretaries and senior White House aides. And Trump often vacillated between criticizing and praising Kelly, sometimes within minutes of each other. I have to wonder if the President isn't seriously considering just leaving the job vacant and running the circus himself.
At an event celebrating the 15th anniversary of the Department of Homeland Security, Kelly joked that he missed everyone in the department "every day", offering a deadpan eye roll and smile that drew laughs and applause. "There are certain things I love that he does, and there are certain things I don't like that he does that aren't his strength".