Richardson is the second Southwestern governor Obama has tapped this week for his Cabinet. Monday he nominated Arizona Gov. Janet Napolitano for secretary of homeland security.
It is also the second time Obama has rewarded a former rival with a Cabinet post. Like Sen. Hillary Clinton - Obama's secretary of state choice - Richardson was a competitor for the Democratic nomination.
A two-term governor, Richardson, 61, was rumored last summer to be a possible Obama running mate. He was also believed to be interested in the secretary of state job before Clinton's selection.
A former secretary of energy and U.N. ambassador for President Bill Clinton, Richardson has shown a knack for diplomacy. He has negotiated with dictators and worked to free hostages and those imprisoned, including a Pulitzer-Prize winning Chicago Tribune journalist jailed in Darfur.
After finishing a distant fourth in the Iowa caucuses, Richardson dropped out of the presidential race in January and endorsed Obama in March. Securing the backing of the nation's top Hispanic elected official provided Obama a major boost.
A Westerner schooled in the Northeast, Richardson has been a close friend of the Clinton family, something that made his endorsement of Obama especially striking.
Once confirmed, Richard's role at the Department of Commerce would be to oversee an agency that among other things gathers economic data, runs the Census Bureau, monitors the weather and deals with trade matters.
His selection is almost certainly to be praised by Hispanic groups, which have been lobbying hard for representation in Obama's administration.
During a meeting yesterday of Obama and governors in Philadelphia, Richardson was noticeably missing, perhaps seeking to avoid the spotlight before his selection.