Tai, 45, who won the backing of congressional Democrats, labor and business circles in recent weeks, played a key role in negotiating stronger labor provisions with the Trump administration in the new US-Mexico-Canada (USMCA) trade deal.
If confirmed as Biden's "trade czar," Tai will play a pivotal role in helping to rebuild ties with key allies, re-energize manufacturing at home and punish Beijing for anti-competitive trade practices.
She would be the first woman of color to hold the job.
Her name surfaced as the leading contender for the job earlier this month, as reported by Reuters.
Biden is expected to formally announce Tai as his top trade negotiator later this week, said one of the sources. A spokesman for the Biden transition declined to comment on the news, which was first reported by Politico.
A Yale and Harvard-educated Chinese American who speaks Mandarin and taught university English for two years in Guangzhou, Tai headed China trade enforcement at the US Trade Representative's office (USTR) from 2011 to 2014.
In that role, Tai was the main attorney litigating trade violation cases against China before the World Trade Organization, experience that will guide her as she works to hammer out the next phase of a trade agreement with Beijing.
In August, Tai called for a different approach to China from the 2-1/2-year tariff war waged by current trade czar Robert Lighthizer, arguing that the United States needed a better offense than tariffs, which, she said, were largely defensive in nature.
News of her selection was welcomed by Democrats in the House of Representatives and Senate.
Senator Ron Wyden, top Democrat on the Senate Finance Committee, called Tai "an inspired choice" and urged the Republican-controlled Senate to process her nomination as quickly as possible.
"Ms. Tai has the experience she needs to succeed as USTR, and her record of getting wins for American workers demonstrates she knows how to champion the values that matter to US families," he said in a statement.
David Skillman, a senior associate at the Arnold & Porter law firm who worked closely with Tai when he was chief counsel to the head of the House trade subcommittee, said she would do well leading USTR as it faced coming challenges."Katherine has terrific policy chops and great political skills, but more importantly, she’s just unflappable. The next USTR has a very tough road ahead of her, and Katherine has the ability to bring people together to make progress," he said.