Buttigieg would be the first Senate-confirmed LGBTQ Cabinet secretary should his nomination make it through the chamber.
The choice vaults a candidate Biden spoke glowingly of after the Democratic primary into a top job in the incoming administration and could earn Buttigieg what many Democrats believe is needed experience should he run for president again.
The role of transportation secretary is expected to play a central role in Biden’s push for a bipartisan infrastructure package.
Buttigieg is seen as a rising star in the Democratic Party but someone who lacked an obvious path to higher elected office given the continued rightward shift of his home state of Indiana.
Other Democrats were also considered for the post, including former Chicago Mayor Rahm Emanuel, Los Angeles Mayor Eric Garcetti and Rhode Island Gov. Gina Raimondo.
After ending his presidential campaign earlier in the year, Buttigieg endorsed Biden and spent much of the general election headlining fundraisers and events for the former vice president.
“I know that may not mean much to most people, but to me it’s the highest compliment I can give any man or woman,” Joe Biden said at the time.
Prior to running for president, Buttigieg had served as the mayor of South Bend since 2012. He did not seek reelection in 2019.
During his tenure as mayor, Buttigieg in 2014 deployed to Afghanistan as an intelligence officer.
Prior to running for office, Buttigieg was a consultant at McKinsey & Company in Chicago.
This is story is breaking and will be updated.
CNN’s Kate Sullivan contributed to this report.