Holder, a former U.S. attorney who served as the No. 2 official in the Justice Department under President Bill Clinton, would have to go through a Senate confirmation. An Obama official and others close to the process told The Associated Press that feelers are being sent around the Senate to see if he'd pass muster.
"It is basically done. There's some paperwork that they need to complete and some other things they want to vet a bit more, like the Marc Rich pardon during the Clinton administration. But unless something changes, I get the impression it's done," the aide told FOX News.
Marc Rich was the fugitive billionaire who was given a pardon by Clinton on his final day in office. Rich's estranged wife, Denise Rich, was a high-paying donor to Clinton.
An Obama official and two Democrats in touch with the transition team confirmed to the Associated Press that Holder is Obama's top choice, but the Obama official said the decision has not been finalized.
CBS News reported Tuesday that Holder has accepted the job offer from Obama. Holder did not return messages seeking comment. Asked Monday by The Associated Press whether he expected to be nominated, he responded in an e-mail: "Who knows?"
In the past week, Obama aides have asked Senate Republicans whether they would support Holder. In particular, the aides questioned whether Holder's confirmation would be delayed because of his involvement in the 2001 pardon.
One person involved in the talks said the Obama team has received some assurances that, while the Rich pardon certainly would come up during hearings, the nomination likely wouldn't be held up. All spoke on condition of anonymity to describe private conversations.
On the last day of Clinton's term, Holder was asked whether the president should pardon Rich, a wealthy commodities dealer who had spent years running from tax charges. Holder said he was "neutral, leaning towards favorable" on the pardon. Clinton later cited that as among the factors that persuaded him to issue the pardon.
Holder has publicly apologized for what he said was a snap decision that he should have paid more attention to. Had he taken more time to review the case, he would have advised against a pardon, he said.
Originally nominated by Ronald Reagan to be a Superior Court judge for Washington, D.C., Holder also served as acting attorney general during the John Ashcroft confirmation hearing in President Bush's Cabinet. Holder now is a partner at Covington and Burling, a prestigious Washington law firm.
If he is nominated and confirmed, he would be the nation's first black attorney general.
FOX News' Mike Emanuel and The Associated Press contributed to this report.