"Jeh Johnson is the right person to take this on," Obama said of the man who was a member of his national security advisory team.
As the Pentagon's top lawyer, Johnson, 56, helped design and implement policies that helped keep the United States safe and kept America's response to modern-day threats "consistent with our values," Obama said. Johnson also has a reputation of working across all agencies of government and is respected as a "team player" who helps reach consensus.
Johnson, Obama said, has "earned the reputation as a cool and calm leader."
"Jeh understands this country is worth protecting ... because of who we are," Obama said. "That's why as a nation, we have to keep adapting to threats ... stay ready when disaster strikes, fix our broken immigration system. I am confident that I could not make a better choice than Jeh, not just for moving the agency forward but for moving the country forward."
Johnson, whose first name is pronounced "Jay," framed many Obama administration national security policies and is widely respected in the administration for his capacity to assess situations or circumstances shrewdly and to draw sound conclusions, an administration official said.
While at the Pentagon, Johnson was at the center of some of Obama's most important national security decisions, including the administration's drive to end the "don't ask, don't tell" law barring gays and lesbians from serving openly in the military.
Johnson's nomination must be confirmed by the U.S. Senate.
Napolitano resigned in July to lead the University of California system. Obama said she was unable to attend Friday's announcement because of her new duties.
Homeland security now is run by Acting Secretary Rand Beers, who is undersecretary for national protection and programs.
Obama praised Napolitano and Beers, saying the United States is more secure under their watch.
Johnson thanked Obama for the honor of the nomination and the "trust you placed in me."
He said he had been out of government service since last year and wasn't "looking for this opportunity."
But when he was called, "I could not refuse it."
The department, created in response to the terror attacks, has the primary responsibility of protecting the United States and its territories from terrorist attacks. Its mission covers counter-terrorism and cybersecurity, but it also oversees issues including the government's response to human-made and national disasters and border security.