McFarland's departure comes less than three months after she was appointed to the post by previous national security adviser Michael Flynn.
K.T. McFarland has been asked to step down from her position as National Security Adviser to President Donald Trump in another White House shake-up.
Reports said the controversial decision to give Bannon a seat at the table was meant to allow him to be Trump's eyes and ears at the NSC meetings and to monitor Flynn. McFarland had been expected to resign following Flynn's ouster in February, but remained on in her role at the request of the president.
The exact date of her departure was unclear, said the USA official, who spoke on condition of anonymity.
McFarland, top national security adviser to President Donald Trump, is in line to be USA ambassador to Singapore.
Powell, an assistant secretary of state for education and cultural affairs in the Bush administration, is fluent in Arabic and was previously president of the Goldman Sachs Foundation.
The official said that McFarland has accepted the offer of the ambassadorship, though that person emphasized that the appointment is still in the process of being made official.
At the same meeting where McFarland told staff members to "make America great again", Flynn talked to them about using their time at the council to gain experience that would help them in other parts of the government. The administration is still awaiting approval from Singapore, and the post requires Senate confirmation.
Donald Trump's National Security Council has even fewer familiar faces following the third forced resignation in less than four months. She also served as one of the top-ranking women at the Pentagon under the Reagan administration. "I think it would be a mistake if we didn't have consternation about the changes - most of the Cabinet haven't even been in government before".