While reviewing the records of potential nominees, the president's advisors have discussed the importance of finding a justice who can build majorities on the court by reaching out to conservatives.
The decision will probably be a pillar of Obama's legacy: The choice of Supreme Court justices, with their lifetime tenure and vast sway over American law, gives presidents one of their most powerful tools to shape the country beyond their own White House years.
One longtime friend of Souter's suggested Friday that Obama's election and powerful hand in the Senate had prompted the justice to act on a long-held desire to retire.
"He hasn't been enjoying the Washington scene" and could have retired several years ago, said John McCausland, vicar of Holy Cross Episcopal Church in Souter's hometown of Weare, N.H. "But it looks like he has 60 votes in the Senate and a president -- well, you can figure out the rest."
Souter is expected to return to the modest 200-year-old New Hampshire farmhouse where he has lived since he was 11. (He has kept a small apartment in Washington.)
"He has been talking every year about his desire to retire at the appropriate moment," McCausland said. "He's looking forward to having a life again."
That life will include hiking and book collecting. Souter has so many volumes, McCausland said, that he may build a new structure to house and organize them.
In addition, he may do some work with the U.S. 1st Circuit Court of Appeals in Boston.
The Obama team has been preparing for a Supreme Court nomination for months. The president set up a judicial working group just after his election in November, and charged it with drawing up a list of candidates for the high court and federal courts around the country.
As early as December, during meetings in Chicago and Washington, Obama suggested the names of people he would seriously consider for the Supreme Court, according to an administration official familiar with the process.
After Obama's inauguration, the review became more formal and more intense. The effort was led by White House Counsel Greg Craig, who established a small team to vet possible nominees.
Atty. Gen. Eric H. Holder Jr. and his staff are not likely to play a primary role in selecting the nominee or trying to win confirmation, according to one senior administration official who requested anonymity when discussing Obama's plans.