(CNN) -- President-elect Barack Obama on Monday announced Sen. Hillary Clinton as his pick for secretary of state, calling her an "American of tremendous stature who will have my complete confidence."
President-elect Barack Obama announced his nomination of Sen. Hillary Clinton as secretary of state.
"Hillary's appointment is a sign to friend and foe of the seriousness of my commitment to renew American diplomacy and restore our alliances," Obama said at a news conference in Chicago, Illinois. "I have no doubt that Hillary Clinton is the right person to lead our State Department and to work with me in tackling this ambitious foreign policy agenda."
Obama also confirmed that he is keeping Defense Secretary Robert Gates in his current post.
Rounding out his Monday announcements, Obama named retired Marine Gen. Jim Jones as his national security adviser, Eric Holder as attorney general, Arizona Gov. Janet Napolitano as homeland security secretary and Susan Rice as ambassador to the United Nations. Watch the news conference »
"I am confident that this team is what we need to make a new beginning for American national security," Obama said. Watch Obama name Clinton as his pick for secretary of state »
Clinton said leaving the Senate would be difficult for her, but said she believes that the best way for her to continue to serve the country is by joining Obama's administration.
"Mr. President-elect, I am proud to join you on what will be a difficult and exciting adventure in this new century," she said at the news conference. Watch what Clinton says about her new role »
Clinton's husband, former President Bill Clinton, who was not at the event Monday, issued a statement expressing his support for his wife.
"In her service to the people of New York and our nation, Hillary has demonstrated the knowledge, passion, resilience, and capacity to learn that our country needs at this critical time.
"She loves being a senator from New York, but as she has in all the 37 years I've known her, she answered the call to serve. I commend President-Elect Obama for asking her to be a part of a great national security team. America will be well-served," he said in a statement.
New York Gov. David Paterson thanked Clinton for her service and said he is consulting with people from all over the state in order to appoint the best possible candidate to replace her in the Senate.
"New York will lose a powerful voice in the Senate. But the nation will gain a powerful voice in the world. Sen. Clinton's wisdom and record of leadership will make her a strong advocate for the cause of liberty, human rights, and the rule of law," he said in a written statement.
In assuming this new post, Clinton will have some control of her staffing, like picking the assistant secretaries, according to sources familiar with the negotiations. iReport.com: What do you think of Obama's cabinet picks?
Clinton, Obama's former rival for the Democratic nomination, also has been told by the Obama team that they will help her fundraise in the next 60 days to help clear her campaign debt, which is about $6.5 million, the sources said.
Asked Monday how he can be sure that his administration will function as a team of rivals and not a clash of rivals, Obama said he has assembled a group of "outstanding public servants" who share a core vision for the country.
"I am very confident that each of these individuals are not going to be leaving the outstanding work that they are currently doing if they weren't convinced that they could work as an effective team," Obama said.
Obama added that he is a strong believer in "strong personalities and strong opinions."
Obama also noted, however, that he would have the final word in setting national security policy. "The buck will stop with me," Obama said.
All of the selections are people who have been mentioned often during weeks of fevered speculation about the likely nominees.
The president-elect has made no secret of his interest in having divergent views within his Cabinet, and Gates has served in various national security roles under Republican presidents, including as CIA director during former President George H.W. Bush's administration.
To some, the choice demonstrates bipartisanship and conveys that Obama has the self-confidence in his leadership abilities to keep one of the more widely respected members of the Bush administration.
"We've got confidence, continuity, and I still think the mission to get out of [Iraq] as soon as possible will be accomplished. So I think it's a great choice," Democratic Rep. Charles Rangel told CNN's "Larry King Live" last week.
Others say keeping Gates could delay the change that Obama promised during his campaign, because it could lead to potential policy conflicts over missile defense funding and a speedy Iraq pullout.
"If we don't have good civilian personnel alongside our good military personnel, we're not going to reform. It can't happen. You need the right people to make it work," former Pentagon comptroller Dov Zakheim said.
As for Clinton, some observers have raised concerns about her husband and suggested that the former president's international business dealings, global foundation and penchant for going off script could present a significant obstacle for the incoming commander-in-chief.
"These are issues that I'm sure are being discussed, and they will have to be worked out, and it's legitimate to ask these questions," said James Carville, a former aide to the Clintons and CNN contributor.
Obama's transition team was given access to Bill Clinton's finances and post-presidential dealings, sources said. As part of the early vetting process, the team looked for any negative information that could jeopardize the prospect of Hillary Clinton as secretary of state.
A particular issue of concern, observers said, was the donor list of Bill Clinton's global foundation, which might show connections to international figures who push policies that could conflict with those of the new Obama administration.
Since exiting the Oval Office eight years ago, Clinton has reportedly raised more than $500 million for the foundation, a significant portion of which financed the construction of his presidential library. The foundation has also doled out millions for AIDS relief in Africa and other charitable causes around the world.
Amid repeated criticism from Sen. Clinton's primary opponents, Bill Clinton would not reveal the extent of the foundation's donor list earlier this year. But The New York Times has reported the list includes some foreign governments, including members of the Saudi royal family, the king of Morocco, a fund connected to the United Arab Emirates, and the governments of Kuwait and Qatar.
The former president has also reportedly solicited funds from international business figures connected to human rights abuses that his wife has criticized, including the governments of Kazakhstan and China.
During the New York senator's White House bid, critics repeatedly said that foreign governments and business executives could try to exert influence through donations to the foundation, which prompted a pledge from the former president to publicly disclose all future donors.
CNN's Ed Henry, Ed Hornick, Kristi Keck and Jamie McIntyre contributed to this report.