Libby was convicted in 2007 on two counts of lying about discussions with reporters, one count of obstruction of justice and a fourth count of making a false statement. He was acquitted of one count of perjury.
Libby's conviction came after a four-year investigation by a special prosecutor into how the name of CIA official Valerie Plame was leaked to reporters in 2003. He was sentenced to 30 months in prison.
The White House released a statement confirming the pardon, with Trump saying Libby is fully worthy of clemency.
"I don't know Mr. Libby," Trump said. "But for years I have heard that he has been treated unfairly. Hopefully, this full pardon will help rectify a very sad portion of his life."
Although the former Cheney aide had his sentence commuted by former President George W. Bush, the conviction remains on his record. Libby also paid a $250,000 fine, performed 400 hours of community service and served two years probation.
Bush said at the time his decision to grant clemency was "fair and balanced."
"It's been a tough issue for a lot of people in the White House and it's run its course and now we're going to move on," Bush said in 2007.
Bush later revealed that Cheney was angry at his decision not to formally pardon Libby, with Cheney saying his chief of staff "deserved a presidential pardon."
Trump had considered granting Libby clemency for months.
The White House noted that a key witness in the case "recanted her testimony, stating publicly that she believes the prosecutor withheld relevant information from her during interviews that would have altered significantly what she said."
In August, Trump pardoned Joe Arpaio just weeks after a federal judge found the former Maricopa County, Ariz., sheriff guilty of ignoring a court order to stop racial profiling in immigration enforcement.