President Bush on Wednesday named Margaret Spellings (search) as his new education secretary.

Making the announcement in the Roosevelt Room of the White House following the annual turkey pardoning event, Bush said he has complete confident in his choice to replace Rod Paige (search), who formally announced his resignation earlier this week.

"She knows the stakes are too high to tolerate failure," Bush said in announcing his nomination. "She believes in high standards and providing the resources needed to meet those standards. In Margaret Spellings, America's children, teachers ... will have a principled, determined ally in my Cabinet. She has my complete trust and she will be an outstanding secretary of education."

Saying education is a topic near and dear to his heart, the president said: "We must ensure that a high school diploma is a sign of real achievement so that our young people have to tools to go to college and fill the jobs of the 21st century."

Spellings, who currently serves as Bush's domestic policy adviser, is a friend who long ago won the president's trust, helped him win elections and managed his school agendas.

"I share your passion for education and your commitment to seeing that each and every child has the skills and tools necessary to realize the American dream," Spellings said in the press conference Wednesday announcing her nomination, of which she which she said she is both "humbled and honored" by. "Our schools must keep our promise to our children and I will do all I can to ensure no child is left behind."

To the president, she delivers exactly what he expects from schools: results.

Karl Rove (search), the president's political strategist, was quoted this fall as saying Spellings is "the most influential woman in Washington that you've never heard of."

"She understands what he thinks. They're very, very close," said Sandy Kress, a lawyer who worked at the White House for Spellings when he was Bush's senior education adviser.

Spellings worked for six years as Bush's education adviser in Texas, pushing policies on early reading and student accountability. They became the model for the controversial federal law, No Child Left Behind (search), that Spellings helped put together from the White House after Bush's election in 2000.

She has overseen a range of domestic policy, from justice to housing, but schools are an issue of deep interest. In an online White House public forum, Spellings has said she's been thrilled to take questions about the new law: "I love talking about education."

Spellings, 46, will take over leadership of the Education Department at a critical time. Many lawmakers, teachers and parents are frustrated by No Child Left Behind, which gives more attention to poor and minority kids but penalizes some low-income schools that fall short.

Calling Paige a "fine educator and leader," Bush said, "this humble and decent man inspired his department and implemented the most significant federal education reform in a generation," referring to No Child Left Behind.

"Students in every background are making hopeful progress in reading and math. The nation's schools are stronger because of Rod Paige's leadership," the president added. "We've made great progress in our schools and there's still much work to do."

Paige, 71, also had a broken relationship with the National Education Association (search), the largest teachers union in the country. He once referred to the NEA as a "terrorist organization."

"This is a great opportunity for the administration to change the tone of its discourse with the education community, particularly the 2.7 million members of the National Education Association who are in schools all over this nation," said NEA President Reg Weaver. "We look forward to finding common ground with Ms. Spellings in her new role."

Spellings must be confirmed by the Senate.

Kress has known Spellings since she was a lobbyist for the Texas Association of School Boards (search) in the early 1990s. He called her practical, willing to take a partial victory, then come back and fight again for the rest of the win.

"She's conservative, but she'll listen to teachers, she'll listen to administrators," Kress said. "She wants to change the system, but she wants to talk to people in the system. She'll work very hard to get it right and involve people so they feel a part of the process."

The ranking Democrat on the Senate education committee, Edward Kennedy (search) of Massachusetts, said Tuesday that Spellings is "a capable, principled leader who has the ear of the president and has earned strong, bipartisan respect in Congress."

Spellings was Bush's political director during his successful run for governor in 1994.

She is married to Robert Spellings of Austin, Texas, and is the mother of two daughters and two stepsons.

FOX News' Liza Porteus and The Associated Press contributed to this report.