Podesta, President Bill Clinton's chief of staff during the Monica Lewinsky sex scandal and Clinton impeachment, will help Obama Chief of Staff Denis McDonough in areas related to the troubled healthcare law, administration organization and executive actions, a person familiar with the plans told the New York Times, which first reported the appointment online Monday.
He will also focus on climate-change issues, a personal priority, the person said.
McDonough helped recruit Podesta, the Times and Washington Post said.
Podesta, who turns 65 Jan. 8, will be part of the White House inner circle for a year, people familiar with the move told the newspapers.
He led Obama's presidential transition in 2008 and has been an outside adviser to Obama since then.
Podesta is the chairman and former president of the Center for American Progress, a progressive public-policy research and advocacy organization, and a visiting law professor at Georgetown University Law Center.
The White House declined to confirm Podesta's recruitment, the Times said. Podesta did not immediately respond to requests for comment.
His imminent arrival comes as Obama seeks to recover public support and credibility after the flawed October start of the Healthcare.gov insurance marketplaces that are central to his signature Affordable Care Act.
Obama this week brought back former chief congressional lobbyist Phil Schiliro from New Mexico to spearhead healthcare issues.