If the Senate confirms Yates and Loretta Lynch of New York, already nominated by Obama to become the next attorney general, the department will be run by two women who are both former U.S. attorneys.
Yates is a career federal prosecutor in Georgia known for taking on public corruption. She was the lead prosecutor of Eric Rudolph, a longtime fugitive who was convicted of several antiabortion and anti-gay bombings, including in Atlanta during the 1996 Summer Olympics.
"Sally's leadership in combating public corruption has rightfully earned the accolades of her colleagues at every level of law enforcement," Atty. Gen. Eric H. Holder Jr. said in a statement.
The Justice Department said Yates would start work in an acting capacity on Jan. 10, even before she is confirmed. She replaces James M. Cole.
The No. 3 official at the Justice Department, Tony West, recently left, meaning the three top jobs will have turned over in a period of several months.
Yates' nomination was applauded by Georgia's two Republican senators, Johnny Isakson and Saxby Chambliss, an indication that she could have a relatively easy confirmation.