Paulson replaces John Snow, who led the Treasury Department for more than three years. Snow, whose resignation was not unexpected, told the White House he wants to leave his position by July 3, The Washington Post reported.
Bush, in an announcement Tuesday in the White House Rose Garden, said Paulson has a "lifetime of business experience. He has an intimate knowledge of financial markets and an ability to explain economic issues in clear terms. He's earned a reputation for candor and integrity."
Paulson, whose nomination needs to be approved by the Senate, said he has seen the world's major economies become independent, adding, "of course, the whole world is dependent upon the U.S. economy as a major engine of its growth.
He said the U.S. economy is "truly a marvel but we cannot take it for granted. We must take steps to maintain our competitive edge in the world."
Snow said he "looked for some time to returning to private life" and did so with a great "sense of satisfaction in what had been accomplished in the last 3 1/2 years."
The new Treasury secretary will be Bush's third and the country's 74th. Paul O'Neill served from early in Bush's first team until December 2002. Snow has had the post since Feb. 3, 2003.