"Acting Secretary Wilkie, who by the way has done an incredible job at the VA - and I'll be informing him in a little while, he doesn't know this yet - that we are going to be putting his name up for nomination to be secretary of the veteran's administration," Trump said Friday. Wilkie was in the room as the president spoke.
Wilkie has served as acting secretary since Trump fired David Shulkin in late March amid accusations of unethical spending and disputes about how to run the organization.
The president's first pick to replace Shulkin was his former personal physician Dr. Ronny Jackson, who withdrew his name from consideration amid accusations of misconduct, including accusations of improperly dispensing medication and drinking on the job.
On Thursday, Wilkie signed a multi-billion dollar, multi-year contract with IT giant Cerner that will replace the VA's outdated electronic health records system. It's one of the largest IT contracts in the federal government, Wilkie said.
The contract was awarded by Shulkin last year, but its fate became uncertain after Shulkin was fired in March and the VA's chief information officer resigned in April.
Veterans service organization The American Legion commended Wilkie for completing the Cerner deal in a statement and also said they “welcome the news of President Trump’s decision today to fill the position of the Secretary of the Department of Veterans Affairs” after the department has been without a Senate-confirmed Secretary for 51 days.
“I congratulate Undersecretary Wilkie on his nomination and look forward to learning more about his long-term views for the VA, including how he plans to implement the VA MISSION Act when it becomes law, as we work through the confirmation process," Isakson said in a statement.
At Thursday's White House press briefing, Wilkie accepted a check from President Trump donating his first-quarter 2018 salary to support the VA's caregiver programs.
"The President's gift underscores his promise to do all that he can for veterans, which includes supporting those who care for our veterans – not just those of us at VA, but the husbands, the wives, the families, and the community caregivers who are out there day in and day out making life easier for those who have borne the battle," Wilkie said.
"I am deeply grateful to President Trump for providing me the opportunity to serve America's veterans and for his generosity in supporting them," he added.
Wilkie served Secretaries of Defense Robert Gates and Donald Rumsfeld as Assistant Secretary of Defense during the George W. Bush administration, from 2005-2009.
The son of an Army artillery commander, Wilkie served in the Navy as an intelligence officer before joining the Air Force Reserve.
ABC News Elizabeth McLaughlin contributed to this report.