At a State Department ceremony on Tuesday, Secretary of State Condoleezza Rice announced that Khalilzad was President George Bush's choice.
Khalilzad's nomination, once it is formally put forward by the White House, is subject to US Senate approval.
"I will work with all Iraqis, all sects, all ethnic groups, men and women, to accelerate success in Iraq," Khalilzad said.
Khalilizad said there had been "great suffering" in Iraq since the 2003 US-led invasion ousted former president Saddam Hussein and set off the bloody conflict that some 140,000 US troops are trying to defeat.
"By success, we mean an Iraq that can stand on its own feet in terms of providing security for its people, controlling its borders, delivering basic services such as education and healthcare, and creating the framework for a prosperous private sector," he added.
If confirmed by the Senate, he will replace John Negroponte, who has become the first US national intelligence tsar.
Negroponte reportedly found the Baghdad assignment so aggravating he contemplated quitting after less than a year in the post.