Haley, a favorite among conservatives, accepted the position this morning.
She is the first woman Trump has chosen for a position in his administration. She will need to be confirmed by the Senate for the post.
"I will not stop until we fight a man that chooses not to disavow the KKK," Haley said on the trail with Rubio, referring to Trump's initial refusal to repudiate white supremacists supporting his campaign. (He has since repeatedly disavowed their support.) "That's not who we want as president."
Trump fired back at her on Twitter.
After her 2016 State of the Union response — which was critical of Trump's brand of politics — Haley told ABC News' Jonathan Karl that Trump is one of the "angriest voices" and should not "throw stones" over political disagreements.
"The one that got me, I think, was when he started saying ban all Muslims," she said after Trump proposed barring all foreign Muslims from entering the U.S. "When you've got immigrants that are coming here legally, we've never in the history of this country passed any laws or done anything based on race or religion."
She has since patched up her relationship with Trump, whom she voted for in the election and met with last week.
"If we as Republicans are going to lead effectively and have staying power as a governing party, we must accept that Donald Trump's election was not an affirmation of the way Republicans have conducted themselves," she said at the Federalist Society's National Lawyers Convention in Washington, D.C.
"The president-elect deserves tremendous credit for the way he was able to connect with the electorate. But he did not do it by celebrating the Republican Party. And the American people did not vote for him because he had an R next to his name. He ran against both parties, against the political system at large," she said.
ABC's Alana Abramson and Ben Siegel contributed to this report.