If confirmed by the Senate, she would be the first woman ever to hold the post.

She was among several women chosen for top economic positions. The Biden transition team said others were set to break racial barriers if confirmed.

Mr Biden has pledged to build a diverse administration. He earlier appointed an all-female senior press team.

His transition team said his picks for senior economic roles would help "lift America out of the current economic downturn and build back better".

Mr Biden has also announced the formation of a Presidential Inaugural Committee ahead of his swearing-in on 20 January. The committee will be responsible for organising inauguration-related activities.

Also on Monday, Mr Biden got his first look at the daily presidential intelligence briefing as president-elect. The overview of national security threats to the US is usually offered as a courtesy to incoming White House administrations, but was initially withheld as Mr Trump refused to concede victory.

Ms Yellen had been widely tipped for the nomination in media reports prior to Monday's announcement.

The 74-year-old economist has served as head of America's central bank and as a top economics adviser to former President Bill Clinton.

She is credited with helping steer the economic recovery after the 2007 financial crisis and ensuing recession.

As chair of the US Federal Reserve, Ms Yellen was known for focusing more attention on the impact of the bank's policies on workers and the costs of America's rising inequality.

Mr Trump bucked Washington tradition when he opted not to appoint Ms Yellen to a second four-year term at the Fed. Starting with Bill Clinton in the 1990s, presidents kept on bank leaders appointed by their predecessors in an effort to de-politicise the bank.

Since leaving the bank in 2018, Ms Yellen has spoken out about climate change and the need for Washington to do more to shield the US economy from the impact of the coronavirus pandemic.

In a tweet following Monday's announcement, Ms Yellen said: "We face great challenges as a country right now. To recover, we must restore the American dream - a society where each person can rise to their potential and dream even bigger for their children.

"As Treasury Secretary, I will work every day towards rebuilding that dream for all."

President of the European Central Bank Christine Lagarde praised Mr Biden's choice, writing in a tweet: "Her intelligence, tenacity and calm approach make Janet a trailblazer for women everywhere."

Republican Chairman of the Senate Finance Committee Chuck Grassley said that he expects Ms Yellen to "get a favourable view" during confirmation hearings before his committee.

Biden transition officials said the senior economic team is set to include "several historic trailblazers".

Picks include former Obama administration official Wally Adeyemo as deputy treasury secretary and economist Cecilia Rouse as chair of the Council of Economic Advisers. If confirmed, Mr Biden's team said both would be the first African Americans in those roles.

Mr Biden will nominate Neera Tanden, who worked with the Obama administration on the creation of Obamacare, to head the Office of Management and Budget. If confirmed, she would be the first woman of colour and first South Asian American to lead the agency.

But she is likely to be at the centre of the hardest confirmation fight in the Senate.

Critics have found tweets by her from four years ago, in which she appeared to stoke debunked conspiracy theories that Russian hackers changed votes in the 2016 election in favour of Mr Trump.

On Monday, the Biden campaign also trumpeted its all-female press team, prompting the Trump White House to point out that its press team has been led by women since 2017, even if some of the lower-level aides are men.

Joe Biden might have his first big presidential appointment fight on his hands.

The president-elect's choice of Neera Tanden, a longtime Democratic operative, to be his White House budget office director - which requires Senate confirmation - is getting sharp attacks from the left and the right.

Grass-roots liberals don't like Tanden because of her outspoken criticism of the party's progressive movement and its standard-bearer, former presidential hopeful Bernie Sanders. Conservatives don't like her because of her personal jabs at their leaders.

And Tanden's views are well-documented, given that some of her most incendiary comments came on social media.

Concern about problematic tweets might seem quaint after four years of Donald Trump's presidency, of course. And the Senate's 2018 confirmation of Ric Grenell - a notorious Twitter provocateur - to be Trump's ambassador to Germany suggests that inflammatory social media posts are not by themselves disqualifying.

Grenell, however, had a Republican majority supporting his nomination. Pending the outcome of Georgia's Senate races, Biden could face a chamber controlled by the opposition - and a left flank disinclined to help.

Biden has touted his ability to work with the Senate to get things done. If he wants Tanden, this will be an early test of his skills.

Monday's nominations came as Arizona and Wisconsin officially certified Mr Biden's victory.

President Donald Trump is expected to issue legal challenges to the vote in both states.

At the Trump campaign's request, a second recount is due to be completed by Wednesday in another state where Mr Biden was declared the winner, Georgia.

On Monday, Georgia's Secretary of State Brad Raffensperger said those trying to overturn the election results in the state were "dishonest actors" spreading "massive amounts of disinformation".

He added: "There are those who are exploiting the emotions of many Trump supporters with fantastic claims, half-truths, misinformation and, frankly, they're misleading the president as well, apparently."

The Trump campaign is also mounting legal challenges to Mr Biden's victories in Michigan and Nevada.

The campaign has seen other lawsuits it filed dismissed in Pennsylvania, Wisconsin, Arizona and Michigan.