Martin Simon / ABC News

Bill Daley tells ABC News that he resigned last week as White House chief of staff, as first reported by the Los Angeles Times.

Senior administration officials confirm that Jacob "Jack" Lew, the current director of the Office of Management and Budget, will be the new chief of staff.

Daley was brought in to replace Rahm Emanuel, but in November his role was "changed," with more power given to senior adviser Pete Rouse.  At the time White House officials insisted the move was in no way a demotion, but it certainly wasn't a vote of confidence.

A former vice chairman at JPMorgan Chase, Daley was heralded as having skills that could help President Obama, namely ties to the business community, and an ability to work with Republicans as seen during his days as President Bill Clinton's Secretary of Commerce. Those relationships have remained rocky, and Daley vented about some of his frustrations in an interview at the end of October with Politico's Roger Simon. "It's been a brutal three years," Daley said. "It's been a very, very difficult three years, an incredible three years. And we are doing all this under the overhang of the worst financial crisis since the Great Depression. F-k! It wasn't like all this was happening in good times."

Daley said that "on the domestic side, both Democrats and Republicans have really made it very difficult for the president to be anything like a chief executive. This has led to a kind of frustration."

He's leaving the White House, but Daley is still an Obama supporter. An Obama campaign official confirms that Bill Daley will assume a new role in Chicago as co-chair of the president's re-election campaign.

"He's got a ton of political experience, knowledge and contacts, and we look forward to leveraging those assets and working closely together to reelect the President this year," the official said.

There will be other co-chairs announced in the coming weeks.

-Jake Tapper and Devin Dwyer