His selections include some of his most loyal campaign advisers and notably some who were not, including Democratic primary rival Clinton and President Bush's defense secretary, Robert Gates, staying in his current post.
Obama also planned to name Washington lawyer Eric Holder as attorney general and Arizona Gov. Janet Napolitano as homeland security secretary, according to Democratic officials. He also planned to announce two senior foreign policy positions outside the 15-member Cabinet: campaign foreign policy adviser Susan Rice as U.N. ambassador and retired Marine General James L. Jones as national security adviser.
The Democratic officials disclosed the plans on a condition of anonymity Sunday because they were not authorized for public release ahead of the news conference.
Those names had been discussed before for those jobs, but the officials confirmed Sunday that Obama will make them official Monday in his hometown.
Last week, he named key members of his economic team, including Timothy Geithner, president of Federal Reserve Bank of New York, as treasury secretary. Obama is not yet ready to name his intelligence advisers, one Democratic official said.
Clinton's nomination is the latest chapter in what began as a bitter rivalry for the Democratic presidential nomination. After Obama defeated her, Clinton backed his general election campaign against Republican Sen. John McCain, and she now has agreed to give up her Senate seat to be his top diplomat.
To make it possible for his wife to become secretary of state, party officials said, former President Clinton agreed:
-to disclose the names of every contributor to his foundation since its inception in 1997 and all contributors going forward.
-to refuse donations from foreign governments to the Clinton Global Initiative, his annual charitable conference.
-to cease holding CGI meetings overseas.
-to volunteer to step away from day-to-day management of the foundation while his wife is secretary of state.
-to submit his speaking schedule to review by the State Department and White House counsel.
-to submit any new sources of income to a similar ethical review.
Bill Clinton's business deals and global charitable endeavors had been expected to create problems for the former first lady's nomination. But in negotiations with the Obama transition team, the former president agreed to several measures designed to bring transparency to those activities.
"It's a big step," said Sen. Richard G. Lugar of Indiana, the top Republican on the Senate Foreign Relations Committee, who said he plans to vote to confirm Clinton.
Lugar said there would still be "legitimate questions" raised about the former president's extensive international involvement. "I don't know how, given all of our ethics standards now, anyone quite measures up to this who has such cosmic ties, but ... hopefully, this team of rivals will work," Lugar said.
Obama and Clinton clashed repeatedly on foreign affairs during the primary. Obama criticized Clinton for her vote to authorize the Iraq war. Clinton said Obama lacked the experience to be president and she chided him for saying he would meet with leaders of nations such as Iran and Cuba without conditions.
Advisers said Obama had for several months envisioned Clinton as his top diplomat, and he invited her to Chicago to discuss the job just a week after the Nov. 4 election. The two met privately Nov. 13 in Obama's transition office in downtown Chicago.
Clinton was said to be interested and then to waver, concerned about relinquishing her Senate seat and the political independence it conferred. Those concerns were largely resolved after Obama assured her she would be able to choose a staff and have direct access to him, advisers said.
Remaining in the Senate also may not have been an attractive choice for Clinton. Despite her political celebrity, she is a relatively junior senator without prospects for a leadership position or committee chairmanship anytime soon.
Clinton "is known throughout the world, very smart, a little harder line than Senator Obama took during the campaign," said Sen. Lindsey Graham, R-S.C., a close McCain friend and adviser who is on the Senate Armed Services Committee.
Sen. Jack Reed, D-R.I., a senior member of the Armed Services Committee, said the Clintons will have to tread carefully to avoid the appearance of conflicts.
"The presumption will be that both Secretary of State Clinton and former President Clinton will be very judicious in what they take on because there's a new dimension here," Reed said. "I think they've put up a good framework. This disclosure, this transparency is the right way to go."
Lugar and Reed both spoke on ABC's "This Week." Graham was on "Fox News Sunday."
Associated Press writer Beth Fouhy contributed to this report.