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Hagel, the only Republican in Obama's cabinet, was brought to the Pentagon to reduce budgets and wind down the war in Afghanistan.

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His departure comes as the White House faces criticism over its handling of a new terrorist threat — the Islamic State in Iraq and Syria (ISIS), and questions had been raised about whether Hagel was the right man for that job.

Obama announced Hagel's departure in a White House ceremony were he was flanked by Hagel and Vice President Biden. He hailed Hagel as an “exemplary defense secretary” who had put the military “on a firmer footing.” “I've known him admired him and trusted him for nearly a decade,” said Obama, who then added that Hagel had decided “it was an appropriate time for him to conclude his service.” A senior administration official said the two had been discussing the possible transition since October. The president plans to nominate a successor shortly, but Hagel said he would remain in the post until that person is confirmed by the Senate. Hagel, clearly emotional, said the “greatest privilege” of his career was leading the men and women of the Pentagon. “I will continue to support you, Mr. President, and the men and women who defend this country every day,” Hagel said. The New York Times, which first reported Hagel's departure, suggested the Defense secretary was being forced out over concerns over his ability to lead the campaign against ISIS. And while Obama gave Hagel a big hug at the end of Monday's ceremony, the pained look on Biden's face — a longtime friend and ally of Hagel’s — may have betrayed some of the behind-closed-doors tension that preceded Hagel's departure. Officials said Hagel had begun speaking to Obama about leaving the administration in October. "In October, Secretary Hagel began speaking with the President about departing the administration given the natural post-midterms transition time," a senior administration official said.

And there have also been reports of high-profile clashes between Hagel and top White House officials, especially on ISIS policy.

Last month, CNN reported that Hagel wrote a memo to national security adviser Susan Rice sharply critical of the White House’s strategy on Syria.

The unnamed source also indicated that Hagel was concerned that the U.S. could lose gains it made in the war against ISIS if it did not alter its strategy toward Syrian President Bashar Assad.

And a story last month in the Times suggested that Secretary of State John Kerry and Hagel were struggling to win favor with the White House. The story suggested that Hagel was often silent in national security meetings, and that the president preferred to solicit advice from Joint Chiefs Chairman Gen. Martin Dempsey.

White House press secretary Josh Earnest said at the time the president was "proud of his national security team."

“The president and his senior team at the White House are proud of the work that the president’s Cabinet are performing to represent our interests around the globe,” Earnest sad.