Alina Habba's brief time as New Jersey's U.S. attorney has ended, following controversy over high-profile prosecutions and political tensions in a divided Senate.

The president wants to keep his former personal lawyer as New Jersey’s U.S. attorney.

The move allows Habba, one of the most visible and controversial U.S. attorneys in the country, to remain in charge and cements the administration’s preference for loyalists in key Justice Department...