Describing the nomination of Levine for the post as historic, Biden said she would lead his administration's health efforts amidst the pandemic.
The announcement makes Levine, a 64-year-old pediatrician, to be the first openly transgender federal official to be confirmed by the US Senate, The Washington Post reported on Tuesday.
"Dr Rachel Levine will bring the steady leadership and essential expertise we need to get people through this pandemic - no matter their zip code, race, religion, sexual orientation, gender identity, or disability - and meet the public health needs of our country in this critical moment and beyond," Biden said in a statement.
Levine, who currently is Pennsylvania's secretary of health, has risen to national prominence for leading the state's public health response to the coronavirus pandemic, despite repeated and ugly attacks on her gender identity, the report said.
Biden's transition team noted that Levine - appointed by Governor Tom Wolf in 2017 as acting health secretary - was confirmed three times by the Republican-controlled state Senate to serve as secretary of health and the state's physician general.
At the time, she was one of only a handful of transgender officials serving in elected or appointed offices nationwide, the report said.
If confirmed as assistant secretary of health, Levine would be the highest-ranking transgender official in the US government.
In a statement released Tuesday afternoon, Levine said she was proud of the work she has been able to accomplish at the Pennsylvania Department of Health.
She highlighted her efforts to address the opioid epidemic by developing "innovative models to get people into treatment and into recovery" and the work her team has done to fight diseases such as HIV and Hepatitis C.
"I am proud of the work we have done as an administration to address health equity, and the work I have done personally to raise awareness about LGBTQ equity issues," she said.
"And I am extremely proud of the work we have done during the last year to save lives in the face of the COVID-19 global pandemic. I look forward to the opportunity to continue to serve Pennsylvanians, and all Americans, as part of the Biden Administration if I am fortunate enough to be confirmed to this position," Levine added.
On Wednesday, Biden, 78, and Kamala Harris, 56, will be sworn in as the President and the Vice President, respectively, of the US.
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