The appointment generated immediate controversy given Mr Whitaker's previous public comments criticising the probe.
Representative Jerry Nadler is in line to become the chairman of the Judiciary panel when Democrats take control of the House in January.
Some Republicans appear to have shared the Democrats' concern over the future of the inquiry, which is being led by Special Counsel Robert Mueller. Senator Susan Collins and Mitt Romney said it should not be impeded in any way. He was a vocal critic of Mr Mueller, arguing in an op-ed for CNN past year that the probe should not go into the finances of Mr Trump and his family members.
Democrats see this latest move as an attempt to do just that. Trump is also mulling Florida Attorney General Pam Bondi, who is on her way out of office, as well as Trump personal lawyer Rudy Giuliani and former Attorney General William Barr, who served in President George H.W. Bush's administration.
Her words were echoed by Democratic party Senate leader Chuck Schumer, who added: "Clearly, the president has something to hide."
The de facto firing, which came a day after Democrats gained control of the House of Representatives in the midterm elections, raised fears that President Donald Trump may be stepping up efforts to shut down the Russian Federation investigation that has dogged his presidency for months.
In piercing attacks, Trump called Sessions weak and beleaguered, complained that he wasn't more aggressively pursuing allegations of corruption against Democratic rival Hillary Clinton and called it "disgraceful" that Sessions wasn't more serious in scrutinizing the origins of the Russian Federation investigation for possible law enforcement bias - even though the attorney general did ask the Justice Department's inspector general to examine those claims.
Sir Tim Berners-Lee launches new ‘Contract for the Web’
So the web remains open and a global public resource for people everywhere, now and in the future. Be creators and collaborators on the web so the web has rich and relevant content for everyone.
"He took the job and then he said, "I'm going to recuse myself.' I said, 'What kind of a man is this?'" Trump said this year in a Fox News interview".
A permanent replacement will be named at a later point, a second tweet from the president said. Deputy Attorney General Rod Rosenstein has overseen Mueller's work.
"Interference with the special counsel's investigation would cause a constitutional crisis and undermine the rule of law".
A Kremlin spokesman, Dmitry Peskov, on Thursday called Mueller's investigation a "headache" for USA authorities but said it "has nothing to do with us", and he declined to comment on Sessions' departure.
The deputy attorney general appointed Mr Mueller to lead the inquiry after Mr Trump fired Federal Bureau of Investigation director James Comey in 2017.
The special counsel has also been investigating whether Mr Comey's firing amounted to obstruction of justice.