Obama announced that Jones's hard-charging deputy Tom Donilon, seen as more intimate with the inner presidential circle than his boss, will take over, as Washington confronts sharp challenges to its power and fears of terror attacks.
Donilon is close to Vice President Joe Biden, and was seen as a fellow skeptic of military arguments for a full-scale counter-insurgency in Afghanistan, before Obama decided last year to send 30,000 more troops to war.
"The American people owe Jim an unbelievable debt of gratitude for a lifetime of service," Obama said, thanking his "friend" Jones for his counsel and dedication in nearly two tough years on the job.
However, few observers will be surprised that Jones, a former Marine general with a refined manner at odds with Washington backbiting, was leaving.
There had long been whispers that Jones and Obama had not melded and the former general's frequent foreign travel was interpreted as a sign he preferred advancing policy abroad to running the national security apparatus at home.
David Rothkopf, an author and expert on the National Security Council, said Jones was chosen originally because he was a man of stature, in line with the "Team of Rivals" governing approach prized by Obama.
"What happened was that he was aloof and the president was aloof and there was no chemistry," Rothkopf said, adding Jones soon became the "odd man out" in Obama's inner circle which includes many 2008 campaign veterans.
Jones played a major role in the Afghan strategy review run by Obama into Afghanistan and Pakistan policy last year and has racked up thousands of miles pushing US diplomacy abroad. He recently returned from Russia.
He told Obama in a White House Rose Garden appearance that he had only come out of retirement because the president wanted to tackle "the hard issues of our time at a very, very difficult moment in our nation's history."
He also said Obama had transformed the image of the United States abroad, in what he said was an achievement that was "astonishing" in such a short time.
The latest staff announcement came just a week after White House chief of staff Rahm Emanuel stepped down to run for Chicago mayor.
Obama's first budget chief Peter Orszag and top economist Christina Romer have also left, and more staff turnover is expected with Democrats facing a grim fate in mid-term congressional polls on November 2.
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