National Intelligence Director John Negroponte will resign and become deputy secretary of state in a move the White House will likely announce by week's end, a senior U.S. official confirms to FOX News.
Negroponte became the nation's first intelligence leader in April 2005, when he took charge of overseeing all 16 spy agencies the U.S. operates. This move puts him back in the loop as a diplomat, working under Secretary of State Condoleezza Rice.
His position has been offered to retired Adm. Michael McConnell, who was former head of the National Security Agency from 1992 to 1996 and was the top intelligence officer under Gen. Colin Powell during the first Gulf War, the official said.
There's no word on whether he has accepted or declined the offer. McConnell is currently a senior vice president at Booz Allen Hamilton, a government contractor and consulting agency
Negroponte, 67, steps down as President Bush develops a new strategy on Iraq. The president has ordered reviews from his own agencies and the bipartisan Iraq Study Group, which recommended a series of changes to reverse the "slide toward chaos."
Negroponte has held a series of tough assignments in the Bush administration and has been at the center of the Iraq debate since before the U.S.-led invasion in March 2003. He served as U.S. ambassador to the U.N. from 2001 to 2004 and ambassador to Baghdad until March 2005 before becoming intelligence chief. He also was ambassador to Mexico, from 1989-93.
Congress established Negroponte's post in late 2004 following the recommendation of the Sept. 11 commission. Yet, it has been at times a struggle for Negroponte and his staff to bring all 16 spy agencies together under one umbrella.
Democrats taking control of Congress on Thursday have promised greater oversight of government agencies. The Senate Intelligence Committee, for instance, is planning hearings this month on the intelligence overhaul that Negroponte helped put in place.
Negroponte's transition to the State Department must be confirmed by the Senate, as would Bush's choice for his replacement. Both changes also will create new openings for the Democrats to debate the administration's intelligence and foreign policy direction.
In an interview with C-SPAN last month, Negroponte indicated that he wanted to stay on through the Bush administration.
Yet his answer to the question — will he "stay with it for a while?" — didn't close to door to a new assignment. Since last summer, it has been said he was interested in the vacancy at the State Department.
"In my own mind at least, I visualize staying with it through the end of this administration and, then I think, probably that'll be about the right time to pack it in," he told C-SPAN.
Rice's deputy spot has been empty since Robert Zoellick resigned in July to take a position with Goldman Sachs. She is said to have approached several candidates for the plum assignment, going for months without any takers.
The Associated Press contributed to this report.