Controversy surrounds both choices, but the president called on the Senate to quickly confirm both.
"The work of protecting our nation is never done. We've got much to do," Obama said at the East Room announcement. "My most solemn obligation is the security of our people."
Obama announced his choice of Hagel, a political moderate who represented Nebraska in the Senate, even as critics questioned the pick over issues including Hagel's views on Israel and Iran.
Facing a potential fight to get Hagel confirmed by the Senate, Obama praised his independence and bipartisan approach, and said that Hagel, a Vietnam veteran, understands war is not an abstraction. He also praised Hagel, 66, as one who could make "tough fiscal choices" in a time of increasing austerity.
Brennan, 57, a 25-year CIA veteran, is a close Obama adviser who has served in his present post for four years.
The president praised him as one of America's most skilled and respected intelligence professionals. Obama said Brennan and Hagel understand that "the work of protecting our nation is never done."
Brennan withdrew from consideration for the spy agency's top job in 2008 amid questions about his connection to harsh interrogation techniques used during the George W. Bush administration.
Hagel, in brief remarks, thanked Obama "for this opportunity to serve this country again, especially its men and women in uniform. ... These are people who give so much to this nation every day."
Hagel voted for U.S. military involvement in the Iraq war at first but later opposed it. He broke ranks with other Republicans to support Obama for president in 2008.
If confirmed, he would replace Leon Panetta as defense secretary.
Obama said Panetta, standing with the others alongside the president, had "earned the right to return to civilian life."
Panetta was CIA director before Obama tapped him to be defense chief.
Along with secretary of state nominee Sen. John Kerry, D-Mass., Hagel and Brennan would play key roles implementing and shaping Obama's national security priorities in a second term. All three men must be confirmed by the Senate.
In nominating Hagel, Obama signaled he is willing to take on a tough confirmation fight. Once Hagel emerged as Obama's likely nominee, GOP lawmakers began sharply questioning his commitment to Israel and his willingness to take a hard line with Iran over its disputed nuclear program.
Of Brennan, Obama said he had an "invaluable perspective" on global affairs. He has traveled extensively in the Middle East and was once CIA station chief in Saudi Arabia. Brennan helped orchestrate administration policy in Yemen and the response to the Arab Spring, and played a role in the raid that killed Osama bin Laden.
"I will make it my mission to make sure that the CIA has the tools it needs to keep our nation safe and that its work always reflects the liberties, freedoms and values that we hold so dear," Brennan said in brief remarks.
Sen. John McCain, R-Ariz., issued a statement shortly after the White House announcement on Brennan, saying he had "many questions and concerns about his nomination to be director of the Central Intelligence Agency, especially what role he played in the so-called enhanced interrogation programs while serving at the CIA during the last administration, as well as his public defense of those programs."
Hagel, something of a maverick among Republican senators during his two terms, has criticized the discussion of a military strike by either the U.S. or Israel against Iran. He also irritated some Israel backers with his reference to the "Jewish lobby" in the United States. And he has backed efforts to bring Iran to the table for future peace talks in Afghanistan.
Obama said that when he and Hagel served in the Senate "I came to admire his courage and his judgment, his willingness to speak his mind even if it wasn't popular, even if it defied the conventional wisdom. That's exactly the spirit I want on my national security team - a recognition that when it comes to the defense of our country, we are not Democrats or Republicans. We are Americans."
Sen. Lindsay Graham, R-S.C., has called Hagel's foreign policy views "outside the mainstream" and has said he would be "the most antagonistic secretary of defense toward the state of Israel in our nation's history."
Although bracing for a confirmation fight over Hagel, the administration has expressed confidence both its nominees will be confirmed.
Supporters of Hagel's nomination have said it would be hard for Republicans to reject a former colleague, especially one who's a Vietnam veteran and served on the Foreign Relations and Intelligence committees.
White House spokesman Jay Carney defended both of Obama selections.
Carney said Hagel's "record demonstrates that he is in sync with the president's policies." He said Obama had worked closely with Hagel both as a senator and with Hagel as co-chairman of his White House intelligence advisory board.
Despite criticism, he said, "Sen. Hagel's record will convince the Senate to confirm him." If confirmed, Hagel would be the first enlisted Vietnam War veteran to serve in the top Pentagon post.
As to questions about Brennan's connection to harsh interrogation techniques used in the previous administration, Carney said, "It is this president who banned torture as one of his first acts in office" and Brennan was on the same page.
Associated Press writers Robert Burns, Donna Cassata and Matthew Daly contributed to this report.