Obama planned to announce his choice Tuesday morning, according to two people with knowledge of his decision.
Duncan has run the country's third-biggest school district for the past seven years. He has focused on improving struggling schools, closing those that fail. Obama highlighted this work by choosing a turnaround story for Duncan -- Dodge Renaissance Academy, a school Duncan closed and then reopened -- for the announcement.
The two had visited the school together three years ago, although they share more than an interest in education: Duncan has played pickup basketball with Obama since the 1990s. In fact, Duncan co-captained the Harvard basketball team and played professionally in Australia before he had a career in education.
Duncan ran an education nonprofit on Chicago's South Side before working in Chicago Public Schools under former chief Paul Vallas, now the schools chief in New Orleans.
Obama's choice has been anticipated, and argued about, by education groups anxious to see what Obama will do to fix the country's ailing schools.
Obama managed throughout his campaign to avoid taking sides in the contentious debate between reform advocates and teachers' unions over the direction of education and the fate of President Bush's No Child Left Behind accountability law.
The selection of Duncan may satisfy both factions. Reform advocates wanted a big-city school superintendent who, like Duncan, has sought accountability for schools and teachers. And teachers' unions, an influential segment of the party base, wanted an advocate for their members; they have said they believe Duncan is willing to work with them.
"Arne Duncan actually reaches out and tries to do things in a collaborative way," Randi Weingarten, head of the 1.4 million-member American Federation of Teachers, told The Associated Press earlier this month.
Duncan deliberately straddled the factions earlier this year when he signed competing manifestos from each side of the debate.
In the education debate, the competing sides break down over the degree to which teachers and schools should be held accountable for how kids are learning, and the role test scores should play in making that determination.
At the heart of the dispute: No Child Left Behind, the law that has grown as unpopular as George W. Bush, the lame-duck president who championed it.
The reform group agrees with the law's general principle of penalties for schools if test scores fail to improve, although nearly everyone agrees the law has problems that need fixing.
The union coalition says test scores aren't the only measure, and that factors far beyond the classroom affect how well kids learn.