Trump earlier Thursday called the probe a "witch hunt".
Yet a special counsel appointment increasingly seemed the only viable option, particularly following this week's revelation that Comey took notes on a February meeting with Trump in which he said the president had asked him to shut down an investigation into Michael Flynn, the administration's former national security adviser.
He did not provide any further detail of the alleged "illegal acts" carried out by the Clinton campaign or the Obama White House.
Former FBI Director Robert Mueller was named special counsel in the investigation, Justice Department officials announced on Wednesday.More news: Oil up on falling United States inventories
The president who admitted to firing FBI Director James Comey because he was irritated by his "showboat" probe into "this Russian Federation thing with Trump and Russia" is the victim.
One striking piece of news emerged from Rosenstein's briefing: He told senators that he had already known Comey was getting fired even as he wrote the memo that Trump cited as a significant justification for the Federal Bureau of Investigation director's dismissal. Jeff Sessions, the attorney general, is compelled to secure himself when it comes to any Russian inquiry due to his campaign with the Russian ambassador. The White House counsel's office was alerted only after the order appointing Mueller was signed, said a senior White House official, who was not authorized to speak publicly by name and commented only on condition of anonymity. Trump rushed out a statement: "I look forward to this matter concluding quickly".
President Trump said in a statement on Wednesday night that "a thorough investigation will confirm what we already know - there was no collusion between my campaign and any foreign entity".
"Each year, the career professionals of the U.S. Department of Justice conduct tens of thousands of criminal investigations and handle countless other matters without regard to partisan political considerations". And of course, as you well know, Trump later admitted that he was going to fire Comey regardless of what anyone said.More news: US slaps sanctions on Venezuela Supreme Court judges
The Justice Department said Mueller has resigned from his job at a private law firm to take the job of special counsel.
A New York-born Vietnam war vet aged 72, Mueller has a reputation as a tough lawman who once even stood up to a president.
A spokesperson for former Trump campaign chairman Paul Manafort, whose ties in Ukraine and Russian Federation have come under scrutiny, declined to comment to the Guardian on the Mueller appointment. He also can not interfere with the workings of the Trump nominated FBI Director who will come as a substitute to administer the federal bureau. And House and Senate investigators had invited Comey back to Congress to explain what happened - although Utah Rep. Jason Chaffetz declared on Twitter that he had trouble finding Comey to invite him to testify to the oversight committee he chairs.
"I believe it hurts our country terribly, because it shows we're a divided, mixed-up, not-unified country", Trump said at a luncheon with a group of television news anchors. Mueller will also investigate Russian intervention in the election generally.More news: Former officials call Trump's disclosure "serious"
By Wednesday evening, a Republican source said that the move effectively shut down Congress' intense digging into Comey and his conversations with Trump. But Rosenstein was politically stampeded into naming Mueller as special counsel by what could turn out to be an entirely spurious news report. Kenneth Starr was appointed in 1994 to investigate the Whitewater land deal, and his probe morphed into the Monica Lewinsky affair and Bill Clinton's impeachment by the House four years later over perjury and obstruction of justice.
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