President Barack Obama plans to nominate San Francisco Federal Reserve Bank President Janet Yellen, a respected policy dove, to be vice chairman of the central bank, a source familiar with the process said.

Yellen would replace Donald Kohn, a 40-year veteran of the Fed who announced earlier this month that he would retire on June 23. The nomination for the four-year term as the Fed’s No. 2 would be subject to Senate approval.

Kohn’s impending departure means that Obama has three seats to fill on the seven-member board of the central bank. The source said top candidates had been identified for each of the three spots, but all selections, including Yellen’s, are subject to completion of a vetting process.

Among the names cited as possible candidates for the third vacancy are Massachusetts Institute of Technology economist Peter Diamond, Harvard economists Jeremy Stein and David Scharfstein, and Johns Hopkins University economist Laurence Ball.

Yellen is considered one of the most "dovish" members of the central bank’s policymakers, meaning she is seen to lean toward policies that will boost growth and promote employment rather than those aimed at keeping inflation at bay.

Yellen, reached by telephone, declined to comment, as did the Treasury Department. The White House did not respond to requests for comment.

"The FOMC top brass is starting to look like the dream team," said Chris Rupkey of the Bank of Tokyo-Mitsubishi, referring to the Fed’s interest rate-setting panel.

"As bad as it looked to lose Fed Vice Chairman Kohn with his decades of experience, the FOMC is going to pick up where it left off with the experience and quiet wisdom," he said.

If nominated and confirmed, Yellen would help steer the Fed out of an unprecedented level of monetary stimulus and defend the Fed’s regulatory capabilities before a skeptical Congress that faults the central bank for lapses that contributed to the financial crisis.

A source said the administration also was vetting a number of other candidates in case any of its top picks fell through.

One of the people under consideration to fill a board seat is Sarah Bloom Raskin, the top banking regulator for the state of Maryland, a different source familiar with the process said.

The administration’s decision to narrow its search to include Yellen and Raskin was first reported by Bloomberg.

Yellen was chairwoman of the White House Council of Economic Advisers under President Bill Clinton between 1997 and 1999 and a Fed governor between 1994 and 1997.

A top-flight economist, she has warned of "undesirably low" inflation and the prospect of a prolonged, sluggish recovery for the U.S. economy.