Kennedy would replace John Roos, who has been ambassador since April 2009.
Kennedy's appointment, which must be confirmed by the Senate, was one of several Obama made Wednesday. In a statement released by the White House, the president called the candidates "fine public servants" and said they "bring a depth of experience and tremendous dedication to their new roles."
Caroline Kennedy is a 55-year-old lawyer who is president of the John F. Kennedy Library Foundation and head of the Senior Advisory Committee of the Institute of Politics at Harvard University. She joined the Board of Trustees of the John F. Kennedy Center for the Performing Arts in September 2012.
She is also on the Board of Directors of New Visions for Public Schools and serves as honorary chairwoman of the American Ballet Theater. She previously was vice chairwoman of the Fund for Public Schools in New York City and served on the boards of the National Association for the Advancement of Colored People Legal Defense and Educational Fund, and the Commission on Presidential Debates.
CNN noted the Harvard and Columbia University-educated Kennedy will become the first woman to hold the post if confirmed by the Senate. The network also noted she served as vice chairwoman of Obama's vice presidential search committee in 2008.
Kennedy, the only living child of the slain president, had expressed some interest in running for the U.S. Senate seat in New York once held by Hillary Clinton but "personal reasons" led her to back away.