Panetta would join a CIA trying to stay abreast of the demands of the wars in Iraq and Afghanistan, as well as the pursuit of Al Qaeda and other terrorist groups.
The Obama team had struggled to settle on a CIA candidate after passing over former high-ranking agency official John Brennan in November, largely because he was seen as too closely tied to the controversial policies of the Bush administration.
Panetta would not have complete control over the agency. He would report to retired Navy Adm. Dennis C. Blair, who was picked by Obama last month to serve as the director of national intelligence, a position created in 2004 to oversee the operations of the CIA and the 15 other agencies that make up the U.S. intelligence community.
Unlike Panetta, Blair has a long track record in national security matters. He held a series of high-level defense posts, including overseeing U.S. military operations in the Pacific. He also served a year at the CIA as the agency's military liaison.
How Blair and Panetta work together could be crucial to the operation of the intelligence community under Obama.
At the CIA, Panetta would face the difficult task of leading an agency with a history of hostility toward outsiders.
Some longtime officials saw the nomination as a signal that Obama was seeking complete political control and feared it spelled a further reduction in the CIA's influence.
The agency, with nearly 20,000 employees around the globe, has seen its role reduced dramatically in recent years in the reshuffling of the intelligence community. CIA insiders have feared the trend will continue under Obama.
As White House chief of staff, Panetta was probably privy to the nation's most sensitive intelligence matters.
He also served on the Iraq Study Group, a panel of experts assembled to advise the Bush administration on the war in Iraq.
Nonetheless, previous CIA directors who arrived as outsiders had troubled tenures and often left prematurely amid internal opposition. Among them were John M. Deutch, a former Defense Department official who served as director in 1995-96.
If he gets the job, Panetta would probably be charged with reining in controversial programs approved by President Bush, including a secret network of CIA prisons, the transfer of detainees to countries known to engage in torture, and the use of harsh interrogation methods.
