US President Barack Obama on Monday nominated controversial former Republican senator Chuck Hagel to lead the Pentagon and proposed that hard-nosed counterterrorism czar John Brennan to head the CIA.

The second term revamp to two pillars of Obama's national security team is expected to win ultimate Senate approval, although Hagel has been strongly criticised by fellow Republicans for his positions on Israel and Iran.

Obama paid particular tribute to retiring Pentagon chief Leon Panetta before giving ringing endorsements to the "outstanding" Hagel and Brennan and urging the Senate not to dally in confirming their important appointments.

"Chuck Hagel is the leader that our troops deserve. He is an American patriot," the president said, heaping praise on a war hero who was awarded two Purple Heart medals for his bravery as a soldier in Vietnam.

"When Chuck was hit by shrapnel, his brother saved him. When his brother was injured by a mine, Chuck risked his life to pull him to safety. To this day, Chuck bears the scars -- and the shrapnel -- from the battles he fought in our name," Obama said.

Some Republicans view Hagel with suspicion because of his views on Iran and Israel and others have never forgiven him for his outspoken criticism of ex-president George W. Bush's handling of the Iraq war.

But Obama, who wants to be remembered as a president who ended wars abroad to set about the tricky task of nation-building at home following a crippling recession, described Hagel as someone perfectly fitted to that mould.

"Maybe most importantly, Chuck knows that war is not an abstraction. He understands that sending young Americans to fight and bleed in the dirt and mud, that's something we only do when it's absolutely necessary."

Administration appointments are often tense affairs in the United States as confirmation hearings provide senators with opportunities to turn away unwanted candidates or score cheap political points, or both.

Hagel, 66, known for a fiercely independent streak and a tendency to speak bluntly, is expected to get particularly rough treatment due to his criticism of America's "Jewish lobby" and opposition to certain Iran sanctions.

In an interview with The Lincoln Journal Star, a newspaper in his home state of Nebraska, Hagel hit back at his critics.

There is "not one shred of evidence that I'm anti-Israeli, not one vote (of mine) that matters that hurt Israel," he said.

If confirmed by the Senate, Hagel will have to manage major cuts to military spending while wrapping up the US war effort in Afghanistan and preparing for worst-case scenarios in Iran or Syria.

Serving as an enlisted man who never joined the officer ranks, Hagel carries a particular empathy for the unheralded infantry "grunts" in the field.

As he grapples with budget pressures, the former sergeant will likely try to shield troops in the field from the effect of spending cuts.

In his typical straight-shooting fashion, Hagel has called the Defense Department "bloated" and said that "the Pentagon needs to be pared down."

Obama, smarting from watching Susan Rice -- reportedly his first choice to succeed Hillary Clinton as secretary of state -- fold her bid in the face of Republican opposition, pressed hard for the Senate to approve Hagel.

"He would be the first person of enlisted rank to serve as secretary of defense. One of the few secretaries who had been wounded in war and the first Vietnam veteran to lead the department," Obama said, calling his appointment "historic."

Brennan, 57, may get an easier ride but is sure to face questions over his support for the use of certain "enhanced interrogation techniques" under the Bush administration and for his masterminding of the US drone program.

The 25-year Central Intelligence Agency veteran, an Arabic-speaking Middle East expert, replaces David Petraeus, who resigned in November after confessing to an extramarital affair with his biographer Paula Broadwell.

Obama highlighted what he called Brennan's incredible work ethic, saying "John is legendary even in the White House" and reminding everyone of a now-famous quote from August 2010.

Asked if he got any down time or was all work and no play, Brennan replied: "I don't do down time."

Trained as a spy, Brennan rose quickly as a counter-terrorism analyst and manager in the Near East and South Asia branch of the agency's intelligence directorate. By 1995, he was executive assistant to George Tenet, the agency's deputy director at the time who later became the agency's longest-serving director.

He also served as interim director of the National Counter-Terrorism Center from 2004 to August 2005.

In a moment of levity at the White House event, the avuncular 74-year-old Panetta drew loud laughs when he said he would be retiring to his walnut farm and "dealing with a different set of nuts."