"Gary will be a trusted voice in my Cabinet, a tireless advocate for our economic competitiveness, and an influential ambassador for American industry who will help us do everything we can, especially now, to promote our industry around the world," Obama said at the announcement held near the White House.
Locke, 57, was the country's first Chinese-American governor, elected to lead Washington in 1996 and re-elected in 2000.
Prior to becoming governor, he served five terms in the Washington state House of Representatives and one term as King County executive. He was chairman of the House Appropriations Committee from 1989 to 1994.
A lawyer, Locke is currently in private practice with Davis Wright Tremaine in the national firm's Seattle, Washington, office.
"Working with the professionals at the Department of Commerce, I'm committed to making the department an active and integral partner in advancing (Obama's) economic policies and restoring the American dream to all Americans," Locke said.
Locke is Obama's third choice to be commerce secretary. His second pick, Republican Sen. Judd Gregg of New Hampshire, cited "irresolvable conflicts" with the administration over the economic recovery bill when he withdrew his name from consideration on February 12.
New Mexico Gov. Bill Richardson bowed out on January 5, citing the distraction of a federal investigation into ties to a company that has done business with his state. Democratic officials told CNN the investigation involves a California company that won municipal bond business in New Mexico after contributing money to various Richardson causes.
Richardson denies any wrongdoing.
Acknowledging his trouble in filling the Commerce slot, Obama joked that he is "a big believer in keeping at something until you get it right."
Another Obama nominee - former Sen. Tom Daschle of South Dakota, who was selected to be secretary of health and human services - withdrew on February 3 after controversy erupted over his tax records and questions over his work in a field that some consider lobbying.
CNN's Ed Henry and Suzanne Malveaux contributed to this report.
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