The White House notified the Senate of the nomination before the announcement Wednesday.
Kennedy is the only surviving child of the late President John F. Kennedy and his wife Jacqueline. If confirmed, Kennedy will be the first woman in the post, replacing John Roos of Silicon Valley, Calif., as the envoy in Tokyo.
Kennedy is being rewarded for helping get Obama elected to the White House, where her father served 50 years ago. The attorney helped him in an endorsement over fellow Democratic candidate Hillary Rodham Clinton -- the only time Kennedy has endorsed a candidate other than her uncle Ted Kennedy in 1980.
Officials in Japan have said they would welcome the nomination.