Lew expected to be nominated for treasury secretary as early as Thursday

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Pros and cons of Jack Lew as potential treasury secretary

What lays ahead for expected cabinet pick?

White House chief of staff Jack Lew is expected to be nominated to replace Treasury Secretary Tim Geithner, sources tell Fox News, with an announcement reportedly coming as early as Thursday.

Two sources close to the process earlier this week told Fox News that Lew was in the pipeline for the nomination. "It is all but a done deal," one said.

Reuters also reports that President Obama will make it official Thursday.

Geithner has said for well over a year that he would like to leave the administration and spend more time with his family after a grueling time playing key roles throughout the economic and fiscal unease of recent years. His tenure at the Treasury followed previous service as head of the New York branch of the Federal Reserve.

Lew has become an Obama favorite through several top posts because of his sharp knowledge of the federal budget and no-drama style.

Picking Lew is a sign the president knows his next Treasury secretary will be smack in the middle of a series of budget battles, starting with the debt ceiling fight that will be brewing during the expected confirmation process.

A red flag is that during the last debt ceiling fight, in the summer of 2011, Lew served as White House budget director and clashed repeatedly with Republicans, who may want to scrutinize him heavily during confirmation hearings.

In fact, advisers to the president say Lew deliberately kept a low profile during the recent fiscal cliff talks so as not to enflame those tensions on the eve of the expected announcement of his nomination for Treasury.

Fox News' Ed Henry contributed to this report.