Kudlow, 70, would replace Gary Cohen, a former Goldman Sachs executive who quit the post after his differences with Trump on imposing a 25 per cent tariff on import of steel and 10 per cent on aluminium.

"Larry Kudlow was offered, and accepted, the position of Assistant to the President for Economic Policy and Director of the National Economic Council," White House Press Secretary Sarah Sanders said.

"We will work to have an orderly transition and will keep everyone posted on the timing of him officially assuming the role," Sanders said.

Kudlow served in the Regan administration when he helped craft the economic policy.

Top American lawmakers welcomed Kudlow's appointment to the crucial administration position.

Senator Lindsay Graham called the appointment "a home run choice" and praised Kudlow for his advocacy of "pro-growth" economic policies.

"He will be a steady hand in helping implement President Trump's pro-growth agenda and will provide insightful advice backed by a deep understanding of how the American economy works," Graham said.

Senator David Perdue said Kudlow would help Trump in making the US more competitive with the rest of the world.

"We need smarter, business-minded people who understand that this president is trying to make the US more competitive with the rest of the world and provide much needed economic relief after many years of failed fiscal policies," he said.

Democratic Congresswoman Ted W Lieu was less enthused by Kudlow's appointment, saying she was "appalled" that the person who will now drive the US' economic policy has argued that war is good for business.

"Our service members are brave patriots, not equity on a shareholder report. In an administration that has already been fraught with disastrous policy decisions, I worry about someone who thinks this way having the president's ear," said Lieu.

"Entering into conflict has to be a last resort — and should never be evaluated primarily on its economic merits. Mr. Kudlows fringe ideas don't deserve a place in the White House," she said.

Independent Women's Forum's Director of Policy, Hadley Heath Manning said Kudlow's economic expertise will again be an asset to the nation, just as it was when he served under Ronald Reagan.

"His analysis as a senior CNBC contributor has always been spot on as he has advocated for low taxes, fiscal restraint, and "free markets, free people"," she said.