Chief Strategist and Senior Counselor Stephen Bannon during a press conference at the White House
Mr Bannon, formerly the head of the populist right-wing, Breitbart News website, will join high-level discussions about national security.
The order was signed on Saturday.
The director of national intelligence and the joint chiefs will attend when discussions pertain to their areas.
Under previous administrations, the director and joint chiefs attended all meetings of the NSC's inner circle, the principals' committee.
Profile: Stephen Bannon
What executive actions has Trump taken?
The National Security Council (NSC) is the main group advising the president on national security and foreign affairs.
It is led by retired lieutenant-general Mike Flynn, who was one of Mr Trump's closest advisers and most ardent supporters during the campaign.
"The security threats facing the United States in the 21st century transcend international boundaries," Mr Trump's executive order said.
"Accordingly, the United States Government's decision-making structures and processes to address these challenges must remain equally adaptive and transformative."
Last week, Mr Bannon described the US mainstream media as "the opposition party", saying it should "keep its mouth shut".
The site he once managed, Breitbart News, serves up an anti-establishment agenda that critics accuse of xenophobia and misogyny. Under Mr Bannon, it became one of the most-read conservative news and opinion sites in the US.
Mr Trump also ordered a restructuring of the Homeland Security Council.
In two separate measures, the president ordered:
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