"I announce this appointment first because the Chief of Staff is central to the ability of a President and Administration to accomplish an agenda," Obama said in a statement. "And no one I know is better at getting things done than Rahm Emanuel."
The Illinois congressman accepted the job Thursday after struggling over family and political considerations.
Emanuel serves in the House Democratic leadership and will have to resign his seat and put aside hopes of becoming House speaker.
"I'm leaving a job I love to join your White House for one simple reason - like the record amount of voters who cast their ballot over the last month, I want to do everything I can to help deliver the change America needs," Emanuel said in a statement.
Emanuel is a fiery Democrat who served as a political and policy aide in the Clinton White House. His selection is a shift in tone for Obama, who chose more low-key leadership for his presidential campaign.
House GOP leader John Boehner of Ohio called Emanuel "an ironic choice for a president-elect who has promised to change Washington, make politics more civil, and govern from the center."
Sources tell CBS News that Robert Gibbs has been tapped to be Obama's press secretary. Gibbs has been Obama's longtime spokesman and confidant and was at Obama's side from his 2004 Senate campaign through the long days on the presidential campaign trail.
Before accepting the position, Emanuel appeared conflicted over whether to take on what promises to be a grueling job. Emanuel told Chicago's WLS-TV that he was honored to be considered but needed to weigh the impact on his family. He was a political and policy aide in the Clinton White House.
"I have a lot to weigh: the basis of public service, which I've given my life to, a career choice. And most importantly, what I want to do as a parent," Emanuel said in an interview aired Wednesday. "And I know something about the White House. That, I assume, is one of the reasons that President-elect Obama would like me to serve. But I also know something about what it means to a family."
Emanuel added: "This is not a professional choice. This is a personal choice about what my wife and I want to do for our family, as much as what to do with my career."
After leaving the Clinton White House, Emanuel turned to investment banking, then won a Chicago-area House seat six years ago. In Congress, he moved quickly into the leadership. As chairman of the Democratic campaign committee in 2006, he played an instrumental role in restoring his party to power after 12 years in the minority.
Emanuel maintained neutrality during the long primary battle between Obama and Sen. Hillary Rodham Clinton, not surprising given his long-standing ties to the former first lady and his Illinois connections with Obama.
Obama has planned his first public appearance since his presidential victory for Friday - a meeting with economic advisers to discuss the nation's financial woes that Americans listed as their top concern on Election Day.
Obama plans to talk to the news media Friday afternoon following the meeting, aides said. He and his wife, Michelle, will visit the White House early next week at President Bush's invitation, aides said.
Obama's schedule Thursday includes meetings with top U.S. intelligence officials preparing him to be commander in chief and transition team leaders tasked with building his entire administration in 10 short weeks.
Obama advisers said he was selecting the leaders of the new government with a sense of care over speed, with no plans to announce Cabinet positions this week.
Obama planned to stay home through the weekend, with a blackout on news announcements so that he and his staff can get some rest after a grueling campaign and the rush of their win Tuesday night. He is planning a trip to Hawaii in December to get away with his family before their move to the White House - and to honor his grandmother, who died Sunday at her home there.
Obama began Thursday as he almost always does, with a workout. Later, he planned to visit with the transition team he officially announced Wednesday but had been under way for weeks. Officials had kept deliberations under wraps to avoid the appearance of overconfidence in the weeks leading to Tuesday's election.
He also planned to head to the FBI office in Chicago, a secure location for him to receive his first president's daily brief. The document is mostly written by the Central Intelligence Agency and includes the most critical overnight intelligence. It is accompanied by a briefing from top intelligence officials that typically lasts 45 minutes to an hour, although Obama's first is expected to be longer.
Mr. Bush said on Thursday that he'll meet with Obama next week as his administration works to achieve a seamless transition of power to the Democrat.
Mr. Bush talked outside the White House as he gathered with a host of Executive Mansion and administration workers to urge cooperation with the Obama team on the transition that will take place over the next 75 days.
Mr. Bush said that "this peaceful transfer of power is one of the hallmarks of our democracy." And he warned that the United States would be vigilant against any attempts by enemies to take advantage of the country during its period of transition.
Later, the White House said the meeting between the president and the president-elect will take place on Monday afternoon.
A statement said: "The Bushes will greet the Obamas, and then the President will visit with the President-elect in the Oval Office. Mrs. Bush and Mrs. Obama will meet in and tour the Private Residence. We understand that the Obama children will not be accompanying them on this visit, but we very much look forward to meeting them."
Treasury Secretary Henry Paulson on Thursday also said he will work closely with Obama to pave the way for a smooth transition as the country battles its worst financial crisis in decades.
Paulson said: "A methodical and orderly transition is in the best interests of the financial markets and Treasury is committed to making sure that the incoming team can hit the ground running in January."
Andrew Card, former chief of staff to President Bush, said he thinks it's good for a president-elect to begin by naming White House staff before cabinet appointments.
"I hope he names his chief of staff very soon," Card said on CBS News' The Early Show. "After, that I hope he'll name a White House counsel and president personnel director. The White House staff can be in place without senate confirmation so important to focus on that."
Card added that President Bush has taken steps to make the transition easier for Obama, such as getting a head start on the process to get security clearance for appointees.
Announcement of the transition team came Wednesday in a written statement from the Obama camp.
The group is headed by John Podesta, who served as chief of staff under President Clinton; Pete Rouse, who has been Obama's chief of staff in the Senate; and Valerie Jarrett, a friend of the president-elect and campaign adviser.
"John Podesta is a seasoned hand," Card said. "He knows Washington and I think it's good he is running the transition for President-elect Obama."
Several Democrats described a sprawling operation well under way. Officials had kept deliberations under wraps to avoid the appearance of overconfidence in the weeks leading to Tuesday's election.