After a lengthy and politically charged search, President Barack Obama has decided to nominate Janet Yellen, the Federal Reserve’s vice chair, to be chairman of the powerful U.S. central bank, succeeding Ben Bernanke at a pivotal time for the economy and the Fed’s monetary policies.

If confirmed by the Senate, Ms. Yellen would be the first woman to head a major central bank anywhere in the world. She also would be the first Democrat chosen to lead the Fed since Paul Volcker was picked by President Jimmy Carter in 1979.

Mr. Obama was scheduled to make the announcement on Wednesday with Ms. Yellen and Mr. Bernanke at his side in the White House’s ornate East Room.

Mr. Bernanke, 59, will serve until his term ends on January 31, completing a remarkable eight-year tenure in which he helped pull the U.S. economy out of the worst financial crisis and recession since the 1930s.

Under Mr.. Bernanke’s leadership, the Fed created extraordinary programs after the financial crisis erupted in 2008 that are credited with helping save the U.S. banking system. The Fed lent money to banks after credit markets froze, cut its key short-term interest rate to near zero and bought trillions in bonds to lower long-term borrowing rates.

Ms. Yellen, 67, emerged as the top candidate after Lawrence Summers, a former Treasury Secretary and White House favourite for the job, withdrew from consideration last month in the face of rising opposition.

A close ally of the chairman, Ms. Yellen has been a key architect of the Fed’s efforts under Mr. Bernanke to keep interest rates near record lows to support the economy, and she likely would continue steering Fed policy in the same direction as Mr. Bernanke.

Sen. Tim Johnson, who heads the Senate Banking Committee, which must approve Ms. Yellen’s nomination, said he would work with the panel’s members to advance her confirmation quickly.