She would replace Tom Donilon, who will be resigning from the post. Obama, is expected to make a formal announcement in this regard later in the day.
58-year-old Donilon will be departing as National Security Advisor in early July, a White House official said.
48-year-old Rice, an Obama confidant, was his first choice for the position of Secretary of State. But due to the strong opposition from the Republicans, who are highly critical of Rice's statements in the aftermath of the Benghazi terrorist attack, Obama could not nominate her for the post, as it required confirmation by the Senate.
Rice is well known for advocating strong relationship with India.
As the US Ambassador to the UN, Rice, maintained a close personal relationship with Hardeep Puri, the then Indian Ambassador to the UN, when India was a member of the Security Council for two years.
Obama will also nominate Samantha Power as US' new ambassador to the UN.
The American diplomatic mission at Benghazi, in Libya, was attacked on September 11, 2012, by a heavily armed group in which four people, including US Ambassador Christopher Stevens, were killed.
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