Businesswoman and top Democratic Party fundraiser Jane Hartley will take over from former ambassador Charles Rivkin if the Senate confirms her nomination.
The post as envoy to one of America's top European allies has been empty since Rivkin left in November to take up a position as assistant secretary of state for economic and business affairs.
Hartley, 63, is the CEO of the Observatory Group, an economic and political advisory firm based in Manhattan.
She has hosted Democratic Party fundraisers in her New York home, and has raised at least $500,000 for Obama since 2012, The Washington Post said.
She and her investment banker husband Ralph Schlosstein are seen as a power couple in the US world of business and finance.
Obama said in a statement announcing his nomination that Hartley would "bring a wealth of experience and talent" to her new role.
A former vice president for corporate communications at Westinghouse Broadcasting, Hartley served as a senior assistant in the office of public liaison under president Jimmy Carter.
Earlier this year, the Obama administration was embroiled in a row with the professional body for diplomats, angered by the number of plum overseas postings being awarded to political appointees.