Buttigieg would be the first LGBTQ cabinet secretary confirmed by the Senate in case his nomination reaches the chamber.
The decision that a Biden candidate spoke brilliantly after the Democratic primary in a senior job in the incoming administration and could gain Buttigieg the experience many Democrats believe is needed if he were to run for president again.
The role of transportation secretary is expected to play a central role in driving Biden for a bipartisan infrastructure package.
Buttigieg is seen as a rising star in the Democratic Party, but someone who did not have an obvious path to a higher elected office, given the continued shift to the right of his home state, Indiana.
Other Democrats were also considered for the post, including former Chicago Mayor Rahm Emanuel, Los Angeles Mayor Eric Garcetti and Rhode Island Gov. Gina Raimondo.
After ending his presidential campaign earlier this year, Buttigieg supported Biden and devoted much of the general election to fundraising and the events of the former vice president.
“I know this may not mean much to most people, but for me it’s the highest compliment I can give to any man or woman,” Joe Biden said at the time.
Prior to running for president, Buttigieg had been mayor of South Bend since 2012. He did not seek re-election in 2019.
During his tenure as mayor, Buttigieg in 2014 deployed to Afghanistan as an intelligence officer.
Prior to taking office, Buttigieg was a consultant for McKinsey & Company in Chicago.
This story is broken and will be updated.
CNN’s Kate Sullivan contributed to this report.