Locke is Mr. Obama's third nominee for the post after former New Mexico Gov. Bill Richardson and New Hampshire Sen. Judd Gregg withdrew from consideration.
Locke, 57, was the first Chinese-American governor in the United States. Elected in 1996, he served two terms as governor and also as chair of the Democratic Governors Association. As governor, he expanded trade between businesses in Washington state and other countries.
Locke pointed to job creation and creating ties to other countries in his speech accepting the nomination.
"Our nation's economic success is tied directly to America continuing to lead in technology and innovation and in exporting those products, services and ideas to markets around the globe," Locke said. "The Department of Commerce can and will help create jobs and the economic vitality our country needs."
Locke is a lawyer at the Seattle firm of Davis Wright Tremaine. In an interview with the Seattle Times, Locke said his primary role at the firm is to help companies in the U.S. sell their products in Asia.
President Obama introduced Locke as an "outstanding public servant."
"Gary will be a trusted voice in my Cabinet, a tireless advocate for our economic competitiveness, and an influential ambassador for American industry who will help us do everything we can -- especially now -- to promote our industry around the world," Mr. Obama said.
The Commerce Department is tasked with job creation and conducting the 2010 Census. It also includes the Patent and Trademark Office and the National Oceanic and Atmospheric Administration.
Politicians in his home state of Washington have praised the pick. Current Washington Gov. Chris Gregoire called Locke an expert on international trade.
"I think it's great," said Gregoire, according to the Associated Press. "Who better than Gary to understand international trade and our relationship with China? He gets it better than anyone."
Denny Heck, a former Democratic Washington state lawmaker, was confident of Locke's record.
"And I would imagine coming of the last two candidates they had that didn't quite work out, Eagle Scout Gary Locke was probably pretty darn appealing to them, he's clean as a whistle, absolutely nobody ever has questioned Gary's integrity and commitment to do the right thing."
Locke is the son of immigrant parents and lived the first six years of his life in a housing project in Seattle. He earned his bachelor's degree in political science from Yale University and a law degree from Boston University in 1975.
In his speech nominating Locke, President Obama pointed to Locke's life story.
"Gary knows the American Dream. He's lived it. And that's why he shares my commitment to do whatever it takes to keep it alive in our time."
Locke served five terms in the state House of Representatives and one term as chief executive of King County, according to CNN.
The Senate must confirm Locke's nomination.
Richardson, President Obama's first commerce pick, withdrew his nomination in January in the face of a grand jury investigation into state contracts. Richardson denied any wrongdoing in connection with the inquiry of a California-based financial company that had done business with New Mexico's government.
Gregg, a Republican, withdrew in February citing critical differences with President Obama on economic and other issues.