The Wall Street Journal reported that Daley is handing over more day-to-day management duties to another senior aide.
The White House reportedly would not characterize the move as a diminishing of Daley's role. The move comes as the White House readies for a bruising re-election campaign, as the president's approval numbers sag in the sluggish economy.
A senior administration official said Tuesday that chief of staff Bill Daley has asked presidential counselor Pete Rouse to take on an expanded coordination and operational role in dealing with White House staff. The shift is part of Daley's efforts to make the West Wing run more efficiently, said the official, who spoke on the condition of anonymity in order to discuss internal White House operations.
Daley, a former bank executive and commerce secretary, joined the Obama administration in January, following the Republican party's sweeping victories in the 2010 midterm elections. He took over as chief of staff from Rouse, who held the position on an interim basis after Rahm Emanuel returned to Chicago to run for mayor.
Rouse, an understated, well-respected figure in the West Wing, had told the president he didn't want the chief of staff job permanently.
Daley has said he plans to return to his native Chicago after the 2012 election.
The staffing changes were first reported by the Wall Street Journal.
The Associated Press contributed to this report