Obama was expected to announce his latest Cabinet shuffle at the White House on Friday afternoon, a White House official said, shortly after he returns from an overnight trip to his Chicago hometown to raise money for Senate Democratic candidates.
He was to be joined by Castro and Donovan, two men both close to the president and whose profiles would receive a significant boost from moving into the higher-profile positions. The White House official who disclosed the nominations would speak only on condition of anonymity before a pending personnel announcement by Obama.
Obama chose Castro to deliver the keynote address at the 2012 Democratic National Convention and his star has been rising ever since. The two men's life stories are similar: Both are minorities raised by single mothers, they hold Harvard law degrees and saw their political careers skyrocket after giving lauded Democratic convention keynote speeches.
Castro, 39, is often among those being talked about as possible Democratic vice presidential candidates in 2016. If confirmed by the Senate, the three-term mayor would become one of the highest-ranking Latino officials serving at the pleasure of the president.
Shaun Donovan, 48, is highly regarded inside the White House as a strong manager. He is a lifelong affordable housing advocate whose work overseeing the federal government's response to the destruction Hurricane Sandy unleashed on the East Coast in October 2012 has earned glowing praise from White House officials, including Obama.
As director of the White House Office of Management and Budget, currently a Cabinet-level post, Donovan would have influence over administration policy and spending. He would be expected to win Senate confirmation a second time for the new post.
Donovan would replace Sylvia Mathews Burwell. Obama recently nominated Burwell to become secretary of health and human services following the resignation of Kathleen Sebelius after the disastrous rollout of the federal website for consumers to buy insurance coverage under Obama's health care law.
Obama had sought to bring Castro into the administration in the past, but he decided to stay in the job he says he looked forward to while growing up. Castro handily won a third term as mayor last year.
But his ambitions apparently have grown along with his stock as a politician with broad appeal to Democratic voters, including fellow Latinos who voted overwhelmingly for Obama in 2012. Castro is Mexican-American.
Serving in Obama's Cabinet would give Castro a national platform to continue building his reputation.
Javier Palomarez, president and chief executive officer of the U.S. Hispanic Chamber of Commerce, said Castro is a ``visionary leader'' who has done more than anyone in San Antonio to address the city's housing needs.
``Mayor Castro is not only an exemplary leader within the Hispanic community, but by all measure, a well-suited candidate to lead the department,'' Palomarez said. ``With great consistency, Mayor Castro has set aside political partisanship in the name of good policy decision making. We hope his confirmation process will proceed with that same collaborative spirit.''