The governor said he had a candidate in mind but declined to release the name. The city has 10 days to appeal his decision, which represents the largest state takeover in U.S. history.
Snyder called it a "sad day" but said he believes supervision by an emergency manager would be the best way to end the city's fiscal spiral, The Detroit News reported.
"There's been too much fighting, too much blame, not enough resources, not enough people working together," Snyder told a town hall meeting. "The key answer I believe all of us want to get to is growing the city of Detroit."
Detroit Mayor David Bing said the governor told him of his decision Thursday by phone.
"The governor's been saying [this is] the direction he's wanted to go in," Bing said. "Too many people think the city can come out of this by itself. I've never been one who's thought like that. I've never fought help. I've never pushed back. I'm a team player. We need more people to come to the table."
The emergency manager would be responsible for either restructuring Detroit's debt or guiding the city through bankruptcy. Snyder said he thinks the process can put the city on the right path within 18 months.
On Thursday, the Detroit City Council voted to have its research and analysis division suggest an outside legal firm to guide decision-making, the News said.
A review team, appointed by Snyder, reported last week Detroit has $14.9 billion in long-term debt and found the city has been "masking over" annual deficits since 2005 with long-term borrowing, the News said. Without the borrowing, the deficits would be $937 million in fiscal year 2012, which ends Sept. 30, the report said.