President-elect Joe Biden is expected to name Janet Yellen to lead the treasury department, US media report.
If confirmed by the Senate, she would be the first woman to hold the position in US history.
The 74-year-old economist previously served as head of America's central bank and as a top economics adviser to former President Bill Clinton.
She is credited with helping steer the economic recovery after the 2007 financial crisis and ensuing recession.
As chair of the US Federal Reserve, Ms Yellen was known for focusing more attention on the impact of the bank's policies on workers and the costs of America's rising inequality.
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Donald Trump bucked Washington tradition when he opted not to appoint Ms Yellen to a second four-year term at the Fed. Starting with Bill Clinton in the 1990s, presidents kept on bank leaders appointed by their predecessors in an effort to de-politicise the bank.
Since leaving the bank in 2018, Ms Yellen has spoken out about climate change and the need for Washington to do more to shield the US economy from the impact of the coronavirus pandemic.
Who is Janet Yellen?
The daughter of a family doctor and an elementary school teacher, she grew up in New York City. She earned her degree in economics from Brown University, before going on to complete a PhD at Yale.
In addition to her work at the Fed and in government, she was a professor at University of California, Berkeley.
She is married to George Akerlof, a Nobel Prize-winning economist whom she met while working as a researcher at the Fed in the 1970s. They have one son, who is also an economics professor.
Her climb to the top of the economics profession also made her a feminist icon in the economics world.
When she left the Fed in 2018, many paid tribute to her leadership by imitating her signature look of a blazer with a popped collar.
How does she fit into the US political scene?
Ms Yellen has a long history of working in Washington. Before Mr Obama named her to lead the Fed in 2014, she had served as one of its board members for a decade, including four years as vice-chair.
At the Treasury, she is likely to be charged with guiding the Biden administration's economic response to the pandemic, which has prompted the worst economic contraction the US has seen in decades and cast more than 10 million people out of work.
The office also oversees tax policy, public debt and international finance and sanctions.
Ms Yellen is seen as someone able to satisfy both progressive and centrist members of Mr Biden's Democratic party. Her nomination to lead the Fed in 2014 won support from some Republicans.
"2 cheers for Janet Yellen at Treasury," liberal public policy professor and former Labor Secretary Robert Reich wrote on Twitter.
While she is not as left-wing as some of the names rumoured to be under consideration, such as Senator Elizabeth Warren, she still "understands the huge toll stagnant wages, systemic racism, and widening inequality have taken on our economy and society", he said.
Ms Warren also added her congratulations, focusing on Ms Yellen's record as bank regulator. One of her final moves as Fed chair was issuing an order limiting Wells Fargo's ability to grow, in response to a fake accounts scandal at the bank.
"Janet Yellen would be an outstanding choice for Treasury Secretary," Ms Warren said. "She is smart, tough, and principled."
What does Wall Street think of her?
Ms Yellen's focus on employment, rather than inflation, gave her a reputation of favouring low interest rates, which spur economic activity by making it less expensive to borrow money.
But under her leadership, the Fed raised interest rates for the first time since 2008 - albeit less aggressively than some more conservative commentators supported.
Her stewardship of that process has won praise on Wall Street, even as it remains hotly debated.
On Monday, Gary Cohn, a former Goldman Sachs executive and economic adviser to Donald Trump, said Mr Biden had made an "excellent choice".
"Having had the opportunity to work with then-Chair Yellen, I have no doubt she will be the steady hand we need to promote an economy that works for everyone, especially during these difficult times. Congratulations," he wrote on Twitter.