Obama plans to make the announcement on Tuesday during a break from his vacation on Martha's Vineyard. A senior administration official discussed the nomination on the condition of anonymity because it was not yet public.
In remarks prepared for the announcement, Obama praised Bernanke for leading the country through a financial crisis and, with his expertise on the Great Depression, helping to prevent a similar crisis.
"Ben approached a financial system on the verge of collapse with calm and wisdom, with bold action and outside-the-box thinking that has helped put the brakes on our economic free-fall," Obama said in prepared marks obtained by the AP.
"The actions we have taken to stabilize our financial system, repair our credit markets, restructure auto industry and help the overall economy recover have all been steps of necessity, not choice. They have faced plenty of critics, some of whom argued that we should stay the course or do nothing at all. But taken together, all of these steps have brought our economy back from the brink. They are steps that are working," Obama said.
Bernanke was appointed Fed chairman by President George W. Bush and sworn in February 2006.