Justice Anthony Kennedy retiring from Supreme Court
The conservative has sided with liberals on many decisions, including the 5-4 rulings that decided same-sex marriage and upheld abortion rights.
In his letter to Mr Trump, Justice Kennedy expressed “profound gratitude” for having served in the highest court.
The 81-year-old judge will retire on 31 July, he said in his letter.
He is the second-oldest justice on the nine-member US Supreme Court.
The court plays a key role in American life and is often the final word on highly contentious laws, disputes between states and the federal government, and final appeals to stay executions.
In recent years, it has expanded gay marriage to all 50 states, halted President Barack Obama’s immigration orders and delayed a US plan to cut carbon emissions while appeals went forward.
Senate Majority Leader Mitch McConnell, a Republican, said on Wednesday that a vote on Mr Trump’s nominee to replace Justice Kennedy – who earned a reputation as the court’s “swing” vote – would take place by the autumn.
Justice Kennedy has frequently sided with abortion rights advocates in the court and news of his retirement has raised fears among pro-choice groups that access to legal abortions in several states could be under threat.
Who is Anthony Kennedy?
Justice Kennedy, who was raised in California, was nominated by President Ronald Reagan and began his term in 1988.
He voted conservative on issues of campaign finance, voting rights and gun rights but was considered a swing vote on key rulings.
Justice Kennedy penned the Supreme Court’s first major gay-rights decision in 1996, protecting LGBT Americans from discrimination.
In 2015, he authored the landmark opinion which gave LGBT citizens the right to marry, writing: “They ask for equal dignity in the eyes of the law and the Constitution grants them that right.”
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As a justice, he routinely favoured personal liberty and the limiting of federal power.
Mr Trump said Justice Kennedy had “displayed great vision” and “tremendous heart”.