And US Representative Mike Pompeo has been selected to be CIA director, news outlets said.
A member of the Senate since 1996, Sessions is known as an outspoken voice against illegal immigration, and in favor of reduced spending and a tough approach to fighting crime.
He was the first senator to endorse Trump during the campaign and is said to have become a close adviser to the real estate tycoon who has no experience in government.
But he is also dogged by racially charged comments he made in the 1980s while working as a prosecutor in Alabama, including allegations he referred to a black subordinate as "boy" and joked about the Ku Klux Klan.
Pompeo, from Kansas, co-authored a report that slammed Trump's defeated rival Hillary Clinton for her handling of the 2012 attack in Benghazi, Libya in which the US ambassador and three other Americans died.
It accused the administration, of which Clinton was then secretary of state, of misleading the public over the attack and failing to protect US personnel.