A South Carolina Republican who has advocated for spending cuts in Congress, Mulvaney will become the chief architect of Trump's budget as the director of the OMB.
In a statement, Trump pledged that his administration will do "great things" and bring the national debt down with Mulvaney leading the office.
"With Mick at the head of OMB, my administration is going to make smart choices about America's budget, bring new accountability to our federal government, and renew the American taxpayer's trust in how their money is spent," Trump said.
Mulvaney called it a "great honor" to be selected for the post.
"The Trump administration will restore budgetary and fiscal sanity back in Washington after eight years of an out-of-control, tax and spend financial agenda, and will work with Congress to create policies that will be friendly to American workers and businesses," Mulvaney said in a statement.
House Speaker Paul Ryan of Wisconsin called Mulvaney "the absolute right choice" to lead the OMB, in a statement released following the announcement.
"Mick is someone I have come to greatly respect and rely on, going back to our time serving together on the Budget Committee," Ryan said. "I look forward to working with Mick in his new role, and I commend President-elect Trump on this excellent selection."