President Bush on Thursday named Jim Nicholson as the new Veterans Affairs Secretary.

Nicholson, who will replace outgoing Cabinet secretary Anthony Principi (search), must be confirmed by the Senate. Principi announced Wednesday that he is resigning.

Nicholson is the current U.S. ambassador to the Vatican and served as the chairman of the Republican National Committee from 1997-2000.

"I'm grateful to Jim Nicholson for his superb work as our ambassador and I've now asked him to serve a new assignment to serve his country," Bush said in announcing his pick, adding that during the past three years as ambassador, Nicholson has helped advance "many vital foreign policy goals," including fighting hunger, AIDS and human trafficking.

Nicholson said he's eager to begin his new job and thanked the president for having confidence in him.

"When I think of growing up dirt poor in a tenant house without plumbing and sometimes without food, I marvel at America, that the boy from Struble, Iowa, may serve in the president's Cabinet. How could this be?" Nicholson said during the announcement in the Roosevelt Room of the White House.

"For me, it is because of the opportunities my country gave me as a cadet at West Point and as a soldier. These experiences have defined my life."

According to his biography at the State Department, Nicholson served eight years as an Army Ranger and paratrooper, then 22 years in the Army Reserve, retiring with the rank of full colonel. Serving in Vietnam, he earned the Bronze Star Medal, the Combat Infantry Badge, the Meritorious Service Medal with Oak Leaf Cluster, the Vietnamese Cross for Gallantry and two Air Medals.

On Thursday, the White House announced that Bush has spoken to several other Cabinet secretaries, and they have agreed to stay on. White House spokesman Scott McClellan said Transportation Secretary Norman Mineta, Labor Secretary Elaine Chao, Interior Secretary Gale Norton and Housing and Urban Development Secretary Alphonso Jackson will remain in their posts, rounding out the Cabinet positions. Nine secretaries are departing, six are staying.

Two top positions are still waiting for a nominee. McClellan would not speculate Thursday who would be named as nominees to head the Energy and Health and Human Services departments.

Bush noted Thursday that as Veterans Affairs secretary, Nicholson will oversee 230,000 employees responsible for ensuring that the nation's veterans receive proper health care and other benefits that "our country has promised them."

Saying that the nation's 25 million veterans have bravely served their country in times of peace and war, "the nation owes them, in return, a VA chief who is attentive" and willing to go the extra mile to see that the veterans receive the services they need. Those efforts will include a continued modernization of the agency, especially its health care system.

"That has been a commitment of my administration for the past four years and will remain a commitment for the next four years," the president added. "Jim has the judgment and the character and the management expertise to do this job well ... I hope the Senate will confirm Jim Nicholson very soon. I look forward to welcoming him to my Cabinet. Congratulations."

Nicholson said it's not only to take care of current veterans, but noted that "many of tomorrow's veterans are bravely defending America's freedom today in uniform abroad."

"All of our nation's veterans — present and future — deserve strong leadership at the Department of Veterans' Affairs."

Principi, who has been in the Bush administration since its inception, said he wants to move on to new responsibilities and challenges.

"I am humbled to have worked side-by-side with you, the men and women who bring VA to life, as you demonstrated every day an all encompassing commitment to our mission and documented your skills in the changed lives of the veterans we serve. Our mission is profoundly satisfying, and you earned your place in the first rank of competence and compassion," Principi wrote in a three-paragraph resignation letter distributed to his staff.

Principi is the ninth member of President Bush's Cabinet to leave his post. He is a graduate of the U.S. Naval Academy and a decorated Vietnam veteran.

The outgoing secretary "has proven himself to be an outstanding executive, a friend to his fellow veterans and good-hearted man," Bush said. "I'm proud of his service."

In a written statement, Bush thanked Principi for his service.

"Under Tony's leadership, we have honored our veterans for their service and sacrifice by increasing and improving health care services, working to eliminate the waiting list for medical care and cutting the disability claims backlog. I appreciate his efforts to improve access to health care for low-income veterans and those with service-related disabilities ... I thank Tony for serving our veterans and our country with integrity and dignity," Bush said.

Also on Wednesday, the White House announced that Treasury Secretary John Snow (search) is staying in his post.

The changeover in Bush's Cabinet is on the high side for a second-term president. Presidents Clinton and Reagan saw seven Cabinet seats change hands after they won new terms, President Nixon nine and Presidents Truman and Johnson four each.

FOX News' Liza Porteus contributed to this report.