The former Boeing executive has been acting secretary for more than four months, since James Mattis resigned in protest over Trump's surprise announcement of a rapid withdrawal of US troops from Afghanistan and Syria.

"Based on his outstanding service to the country and his demonstrated ability to lead, President Trump intends to nominate Patrick M. Shanahan to be secretary of defense," a White House statement said.

A politically flexible management professional originally brought to the Pentagon to modernize its trillion-dollar acquisition program, Shanahan, said he was happy to accept the nomination.

"I am honored by today's announcement of President Trump's intent to nominate," he said in a statement.

"If confirmed by the Senate, I will continue the aggressive implementation of our National Defense Strategy."

"I remain committed to modernizing the force so our remarkable soldiers, sailors, airmen, and marines have everything they need to keep our military lethal and our country safe."

Shanahan, 56, was Mattis's own pick in 2017 to be deputy secretary of defense, overseeing the management of the massive US military bureaucracy.

Before joining the Pentagon, he spent 30 years at Boeing, where he earned the nickname Mr Fix-It for having put the problem-saddled Dreamliner program back on the tracks.

Since taking the Pentagon's reins on January 1 as acting secretary, he has kept a low profile while bending to Trump's pressure to deploy Defense Department funding and manpower to the southern border to halt the inflow of migrants from Central America.

But he first had to undergo an investigation into allegations that he was a biased advocate for Boeing, especially against rival aerospace company Lockheed Martin, the builder of the F-35 joint strike fighter.

After he was cleared of those allegations two weeks ago, the way was open for Trump's nomination.