President-elect Barack Obama will nominate former Iowa Gov. Tom Vilsack as agriculture secretary, a Democratic official familiar with the transition confirmed Tuesday.

A formal announcement is expected Wednesday at a Chicago news conference.

Vilsack, a Democrat, is closely allied with fellow Iowan Tom Harkin , chairman of the Senate committee that will hold confirmation hearings for the next secretary.

He is a strong advocate of ethanol as an energy source and of legislation to combat global warming and he generally gets good grades from environmentalists.

The selection comes as something of a surprise, however. After initially being viewed as the favorite for the post, Vilsack said last month that he had not been interviewed and would not be nominated.

Vilsack may be challenged to begin the process of overhauling the agriculture subsidy programs, which were just reauthorized earlier this year (PL 110-246). Obama has singled out wasteful crop subsidy payments as a place to save taxpayer dollars.

Harkin has been a proponent of shifting funds from commodity payments to conservation and nutrition programs. Having an ally in charge of the Agriculture Department may help advance that agenda.

Harkin has supported Vilsack since he won his first of two terms as governor in 1998. Harkin also backed Vilsack’s short-lived presidential campaign, which was abandoned in February 2007 after about three months.

Vilsack then backed Sen. Hillary Rodham Clinton ’s bid for the presidency, becoming the New York Democrat’s national campaign co-chairman, while his wife was named co-chair of the Iowa state campaign.

After Clinton dropped out of the race in June, Vilsack endorsed Obama and campaigned for him throughout the fall. He has written a series of op-ed articles that echoed the president-elect’s position on the need for a cap-and-trade system to regulate carbon dioxide emissions.

“By locking up carbon through clean technologies and generating less carbon through renewable energy sources, we create home-grown carbon credits direct from the family farm,” Vilsack wrote in an Oct. 16 column in the St. Louis Post Dispatch.

Carbon credits then could be sold on the open market “just as if they were soybeans or lean hogs,” generating “a new revenue stream and creating a new ‘cash crop’ that just happens to help save the planet at the same time,” he added.

The article went on to say that Iowa is poised to take part in the new economy through investments in cellulosic ethanol, biofuel plants and wind farms that have already created jobs and fostered energy independence.