The president announced the nomination of REI president and CEO Sally Jewell late Wednesday morning.
"Jewell knows the link between conservation and good jobs," said Obama during the announcement.
Seattle-based REI sells clothing and gear for outdoor adventures with more than 100 stores across the country.
Prior to joining REI, Jewell spent 19 years in the commercial banking industry, according to her biography on REI's website.
"I have a great job at REI today, but there is no role that compares to the call to serve my country," said Jewell.
"Jewell will be the first Interior Secretary who frequently hikes in her native Washington State," said the president.
If confirmed, she would replace outgoing Interior Secretary Ken Salazar and will be in charge of 500 million acres of public land including Yellowstone Park.