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5 year oldHe tweeted that his spokeswoman would return to her home state of Arkansas, later praising her as a "warrior".
"She is a very special person with extraordinary talents, who has done an incredible job," Mr Trump wrote.
She started out as deputy press secretary before replacing Sean Spicer in the top post in July 2017.
Mrs Sanders, 36, has been a loyal mouthpiece, famously saying that God "wanted Donald Trump to become president".
At a White House event on Thursday, Mr Trump described her as "a special person, a very, very fine woman".
She said her role was "the honour of a lifetime".
After 3 1/2 years, our wonderful Sarah Huckabee Sanders will be leaving the White House at the end of the month and going home to the Great State of Arkansas....
— Donald J. Trump (@realDonaldTrump) June 13, 2019
"This is something I will treasure forever," she said. "I'm going to continue to be one of the most outspoken and loyal supporters of the president."
The mother-of-three said she was looking forward to spending more time with her children.
"She's a warrior, we're all warriors, we have to be warriors," Mr Trump added.
The president did not name a replacement press secretary.
Mrs Sanders had a combative relationship with the media, often repeating her boss' allegation of fake news.
White House press conferences have become increasingly rare during her tenure.
Her last media briefing was on 11 March - 94 days ago.
Mrs Sanders hosted fewer news conferences than any of the preceding 13 press secretaries, according to the American Presidency Project.
Mr Trump has opted to be his own communicator-in-chief, frequently making impromptu remarks to journalists above the buzz of presidential helicopter Marine One on the South Lawn of the White House.
Mrs Sanders' time in the post was not without controversy, and she was accused of lying to journalists.
After Mr Trump fired FBI Director James Comey in May 2017, she said she had "heard from countless members of the FBI that are grateful and thankful for the president's decision".
But she told special counsel Robert Mueller, during his investigation into whether the Trump election campaign had colluded with Russia, that this claim was "a slip of the tongue" that was "not founded on anything".
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