Trump announced the former WWE CEO is resigning as the head of the Small Business Administration at Mar-a-Lago on Friday .... saying "She has been one of our all-time favorites."

"I knew she was good, but I didn't know she was that good."

Although McMahon is stepping down, she's not leavin' Trump -- she's putting her focus on his reelection.

"She'll be leaving, she's going to go and help us with a very, very important year-and-a-half that we have coming up," Trump told reporters.

McMahon is an original member of Trump's cabinet -- she was confirmed back in February 2017.

We spoke with WWE legend Kurt Angle prior to McMahon taking the job ... and he said she's a "genius," adding, "If you doubt Linda McMahon, you'd have to be literally crazy."

No word on who will be Linda's replacement ... but Trump says she'll be part of the process.