He is considered the court's leading liberal, but has also often been able to find conservative allies.
The top US court's ideological makeup became more conservative following two appointments by George Bush, Obama's predecessor, with five conservatives and four liberals on the nine-member bench.
Stevens' retirement is unlikely to change that balance as Obama said he would name a successor in the liberal's mould.
Obama paid tribute to Stevens on Friday and said his nominee, like the outgoing justice, would know that powerful interests must not be allowed to drown out the voices of ordinary citizens.
"I will seek someone in the coming weeks with similar qualities - an independent mind, a record of excellence and integrity, a fierce dedication to the rule of law, and a keen understanding of how the law affects the daily lives of the American people," Obama said.
Ian Millhiser, an analyst at the Centre for American Progress, told Al Jazeera that the supreme court's makeup had international ramifications because it can decide on cases such as on the fate of Guantanamo Bay detainees and the way the US treats non-citizens.
|Stevens' retirement is unlikely to change the ideological makeup of the top court [Reuters]
Stevens showed no tolerance for the notion that the US president could throw a person who may well be innocent into prison, a view also shared by Obama, Millhiser said.
"So I think the replacement for Stevens is going to be consistent in that regard."
Supreme Court appointments have become major political battles in congress since the high court decides contentious social issues such as abortion and the death penalty and high-stakes business disputes.
Among the handful of cases to be decided next term, the justices will consider whether vaccine manufacturers can be sued for damages.
Justices serve until they retire or die, meaning that Obama's choice – his second since taking office, having appointed Sonia Sotomayor last year - could shape the court for decades, long after he leaves office.
In the senate, which will vote on the nomination, Democrats praised Stevens and urged Obama to name someone who can continue his legacy while Republicans promised thorough scrutiny of any nominee.
Mitch McConnell, the senate Republican leader, said "Americans can expect senate Republicans to make a sustained and vigorous case for judicial restraint and the fundamental importance of an even-handed reading of the law".
Tough battle expected
The opportunity to make a second appointment to the high court in less than two years is a double-edged sword for Obama.
|Obama says he wants a replacement seated for the court's new session in October [AFP]
It gives him a chance to leave his mark on the court but it could also dominate congress for some time and make it tougher for Obama's fellow Democrats to focus on the economy and job creation, issues which are expected to dominate November's elections.
It also could complicate last-ditch efforts by some Democrats and Republicans to win senate passage of compromise legislation to combat global climate change.
Last year, Obama named Sotomayor as the court's first Hispanic justice, replacing David Souter. She was confirmed on a largely party-line vote of 68-31, and Millhiser said the selection process for Stevens' successor could be positive if Republican senators showed integrity and exercised independent judgement to put nation above politics, like the nine who voted for Sotomayor.
An Obama administration official said the president was considering about 10 potential nominees to replace Stevens.
Among the leading candidates are Elena Kagan, the solicitor-general, and US appeals court judges Diane Wood and Merrick Garland.
All are considered moderate liberals and could face varying degrees of Republican opposition, but even conservative activists said each would probably win a simple majority vote in the senate, where Democrats hold 59 of 100 seats.