Carrie Prejean appeared by Trump's side as he made the announcement at New York's Trump Tower.
Trump also defended the answer that Prejean gave at last month's Miss USA pageant when she was asked her view of marriage by judge Perez Hilton, a celebrity blogger. She said she believes marriage is between a man and a woman.
"It's the same answer the president of the United States gave; it's the same answer many people gave," Trump said. "She gave an honorable answer; she gave an answer from her heart."
Trump said he and other pageant officials had reviewed racy photos of Prejean and decided they were acceptable.
"We are in the 21st century. We have determined the pictures taken are fine," he said, adding that "in some cases the pictures were lovely."
After Trump spoke, the 21-year-old Prejean, who was accompanied by her parents, took her turn at the lectern, defending herself against what she described as vicious attacks.
She talked about getting thousands of letters and e-mails from people supporting her and said, about the marriage question, that Hilton had asked her a "politically charged question with a hidden personal agenda."
"I stated my honest belief," she said.
Hilton, whose real name is Mario Lavandeira, is best known as a celebrity blogger but has also branched off into gay rights advocacy.