Mr. Trump's purge of officials has intensified in the months since the Republican-led Senate acquitted him in the impeachment trial.
Barr, in a surprise late-night announcement, said the U.S. Attorney in Manhattan, Geoffrey Berman, was stepping down and that Trump would nominate Securities and Exchange Commission Chairman Jay Clayton to take Berman's spot.
Mr Berman is also at the centre of a row between the Duke of York and American authorities over his availability to answer questions about Epstein, and has accused Andrew of "shutting the door" on the probe into the child sex offender. "I have not resigned, and have no intention of resigning", said Berman, who noted in his statement that he found out he was supposedly leaving via Barr's press release.
Berman's statement Friday night said he would stay on the job until a nominee was confirmed by the Senate.
Berman, he said, is welcome to testify at a committee hearing on the topic on Wednesday.
A senior department official said Clayton was planning to leave the administration, wanted to move back to NY and expressed interest in the Southern District position, and Barr thought he would be a good fit. "As chairman, I have honored that policy and will continue to do so".
Hours later, Berman issued his own statement saying he had learned that he was being pushed out through a press release.
House Judiciary Committee Chairman Jerry Nadler tweeted, "America is right to expect the worst of Bill Barr, who has repeatedly interfered in criminal investigations on Trump's behalf".
Since being appointed in January 2018, Berman has not shied from taking on figures in Trump's orbit.
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Geoffrey Berman was appointed acting U.S. Attorney for the Southern District of NY by Trump's then Attorney General Jeffrey Sessions in January 2018 but has overseen the investigations of several Trump associates including Rudy Giuliani and Michael Cohen.
Berman's team aggressively investigated and prosecuted Trump's former personal attorney and fixer, Michael Cohen.
But the Justice Department's Office of Legal Counsel argued in a 1979 opinion that the "power to remove a court-appointed US attorney rests with the president".
Mr Bharara said the timing and manner of the move to replace Mr Berman was odd.
Mr Bharara, an outspoken critic of the president, said the timing of the push to replace his successor was odd.
He added: "Why does a president get rid of his own hand-picked US Attorney in SDNY on a Friday night, less than 5 months before the election?" Bharara wrote on Twitter. "A previous action by this USA attorney or one that is ongoing?" Because of this, it was not immediately clear whether Barr could force Berman out.
The following April, in the absence of a formal nomination by Trump, the judges in Manhattan federal court voted to appoint Berman to the position permanently. The judges were legally obligated to fill the position because Trump left it vacant without a Senate-confirmed attorney for more than one year. The official pointed out that the US attorney's position is a political appointment.
USA attorney for the District of New Jersey Craig Carpenito is seen at a Senate judiciary committee hearing in Washington on June 9.