Panetta, a former California congressman, enjoys a reputation as an astute budget manager but has little hands-on intelligence experience, The New York Times reported.
If confirmed by the U.S. Senate, Panetta would take over a U.S. spy agency Obama criticized during his campaign for using interrogation methods decried as torture.
John M. Deutch, CIA director under Clinton and now a professor at the Massachusetts Institute of Technology, called Panetta and retired Adm. Dennis Blair, Obama's apparent choice for National Intelligence director, an "absolutely brilliant team." Panetta is a "talented and experienced manager of government and a widely respected person with Congress," Deutch told the Times.
As CIA director, Panetta would report to Blair. Neither choice was announced Monday.
Besides his managerial skills, Obama's officials noted Panetta enjoyed bipartisan support on Capitol Hill, has significant foreign policy experience and was appointed by President George Bush on the Iraq Study Group, the bipartisan panel that examined the war and made U.S. policy recommendations.
"He will bring a wealth of knowledge of the government to the CIA post and an outside perspective that I think might be helpful at this juncture in the CIA's history," said Lee Hamilton, a former chairman of the House Intelligence Committee and a co-chairman of the Iraq Study Group.