Mrs Haley is the daughter of Indian immigrants and had been a vocal critic of Mr Trump on the campaign trail.
The 44-year-old has been characterised as a rising star within the Republican party and is the youngest governor in the US.
Although she eventually voted for Mr Trump, the governor had lamented she was "not a fan" of either him or rival Hillary Clinton.
Mrs Haley endorsed Florida Senator Marco Rubio during the Republican primaries, later throwing her support behind Senator Ted Cruz - Mr Trump`s final rival before he became the party`s nominee.
Born Nimrata "Nikki" Randhawa, Mrs Haley is the first minority and female governor of South Carolina, a deeply conservative state with a long history of racial strife.
She took a public stand against resettling Syrian refugees in South Carolina and also opposed President Barack Obama`s signature healthcare law.
Earlier this month, Mrs Haley was elected vice chair of the Republican Governors Association, paving the way to becoming chairman of the group in 2018.
The Indian-American, who is in her second and final term as governor, was elected in 2010, riding the wave of the Republican Tea Party with the support of Alaska Governor Sarah Palin.
Prior to becoming the state`s chief executive, she served six years as a member of the state`s House of Representatives.
Mrs Haley, who was raised in a Sikh household and now identifies herself as a Christian, is married to Army National Guard Capt Michael Haley and has two children.
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