Leavitt, Utah's governor before joining the Bush administration in late 2003, would succeed Tommy Thompson (search), who resigned on Dec. 3. Leavitt served as Utah's governor for 11 years before Bush appointed him to lead the EPA last year.
"He's managed the EPA with skill and a focus on results," Bush said in the Roosevelt Room of the White House in announcing Leavitt's nomination.
"He's an ideal choice to lead one of the largest departments of the United States government," the president continued. "The Department of Health and Human Services touches the life of every person in this country, from the safety of our food and medicine to the Medicare program to preparing for any kind of emergency. HHS has comprehensive responsibility for the health of Americans."
As the former governor of Utah, Leavitt helped improve child welfare services and oversaw efforts to get many government services online, Bush added.
As head of HHS heading into Bush's term, Leavitt will help the administration implement its new prescription drug benefit program under Medicare for seniors, work to help fund faith-based group services like addiction treatment and pursue medical research that's carried out with "vigor and moral integrity," Bush said, as well as help further protect the country against any sort of biological or other attack.
"Mike Leavitt is the right individual to lead HHS in all these vital commitments," the president added.
Leavitt, 53, thanked Bush for showing confidence in him. "I feel a real sense of understandable regret" about leaving the EPA, he said.
He said HHS plays a vital part in the lives of every American.
"I look forward ... to the implementation of the Medicare prescription drug program in 2006, medical liability reform and finding ways to reduce the cost of health care," Leavitt said. "I am persuaded that we can use technology and innovation to meet our most noble aspirations and not compromise our other values that we hold so dear."
The HHS secretary oversees Medicare and Medicaid, the mammoth government health programs for the elderly, poor and disabled, as well as the FDA, the Centers for Disease Control and Prevention, the National Institutes of Health and the Indian Health Service.
The agency has a budget of more than $500 billion and 67,000 employees.
Thompson, 63, announced Dec. 10 that he was leaving the department.
"I do not tender my resignation easily. While these years have been challenging, they have been rewarding," the former Wisconsin governor said during a press conference.
"After nearly 40 years in public service ... it's time for me and my family to move on to the next chapter in our life."
Thompson's departure came as no surprise, as he had indicated in the past that he would like to move on in his career to do other things.
HHS went on a "war-time footing" soon into Thompson's tenure as chief of HHS, Bush noted Monday, and he had to almost immediately deal with preparing the nation for possible biological attacks. Also during his term, the president said, Thompson helped set in motion improvements in Medicare, helped reform welfare laws and worked closely with state and local officials to make sure public health programs functioned effectively.
"Tommy Thompson is a good friend who has given every day of the past 38 years to public service," Bush said. "Tommy has my great gratitude for a job well done."
At EPA, most of Leavitt's focus has been on crafting strategies to reduce air pollution. While in Utah, he had cut several environmental deals with the Bush administration, including settling a long-standing dispute over ownership of roads across federal land. He also negotiated exchanges of state and federal land, some of them questioned by Interior Department auditors.
He also had advocated a major highway extension through wetlands and wildlife habitat near the Great Salt Lake, a project halted by the 10th Circuit U.S. Court of Appeals because of concerns about wildlife needs.
Leavitt, a father of five and a devout Mormon, moved to Washington in the past year with his wife, Jacalyn, and a son in high school. Before becoming governor, he was chief operating officer of the Leavitt Group, an insurance firm.
Leavitt's nomination would have been the last for Bush to announce to fill out his second-term Cabinet but the president now also has to name a new head of the Homeland Security Department to take the place of Bernard Kerik (search), who abruptly withdrew his nomination Friday night, citing immigration problems with a family housekeeper.
Possible names for the position include Connecticut Sen. Joe Lieberman, a Democrat, and former Federal Emergency Management Agency chief Joe Allbaugh, among others.
Prior to Bush's Monday announcement, the buzz around the Beltway was that Thompson's likely successor in Health and Human Services was Mark McClellan (search). He oversees the Medicare program and is the brother of White House press secretary Scott McClellan.
But McClellan is overseeing the new Medicare prescription drug law, which takes full effect in 2006, and Bush was said to have been reluctant to take McClellan from his post during this critical period.
The latest Cabinet shuffle comes as the president prepares to head into his second term in the White House.
FOX News' Liza Porteus and The Associated Press contributed to this report.