Podesta, a Chicago native, has served as an external adviser to Obama since working on the Obama-Biden transition to office in 2008. He founded the Center for American Progress in 2003 and, since handing off the presidency in 2011 to Neera Tanden, has served as chair and counselor to the left-leaning think tank.
Podesta's appointment comes as polls show Obama's standing at an all-time low, with a majority saying he is neither honest nor trustworthy. The president's popularity has swooned since the botched rollout of the Obamacare website, healthcare.gov. The Times said Podesta agreed to serve for one year.
"Smart move," Democratic strategist Chris Kofinis told Politico. "John Podesta brings a level of experience and knowledge that can only help make things better."
Politico last month reported speculation that Podesta would soon join Priorities USA, the pro-Obama super PAC that is likely to cozy up to Hillary Clinton's presidential campaign, if she runs. The Times' report puts that talk to rest.
Read the full report at The New York Times.