WASHINGTON—President Biden will nominate Michael Barr, a former Treasury Department official, to serve as the Federal Reserve’s top banking regulator, the White House said, after Mr. Biden’s first pick for the job withdrew amid opposition from Republicans and a key Democratic senator.

If confirmed, Mr. Barr would serve as the Fed’s vice chairman for supervision, charged with overseeing the largest U.S. financial firms including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.

“Michael brings the expertise and experience necessary for this important position at a critical time for our economy and families across the country,” Mr. Biden said in a statement. Mr. Barr, the president added, “understands that this job is not a partisan one, but one that plays a critical role in regulating our nation’s financial institutions to ensure Americans are treated fairly and to protect the stability of our economy.”

Sarah Bloom Raskin, Mr. Biden’s first nominee for the job, withdrew from consideration last month. She took herself out of the running after West Virginia Sen. Joe Manchin, a key Democratic vote in the evenly divided chamber, said he couldn’t support Ms. Raskin’s nomination, citing her views on addressing climate change.

Mr. Biden said in the statement Friday that he would work with the Senate Banking Committee to move the nomination forward quickly, and he encouraged the Senate to confirm his other nominees to the Fed. A vote on those other nominees, including Jerome Powell’s nomination for a second term as the Fed’s chairman, is expected later this month.

White House officials believe Mr. Barr can attract enough support to be confirmed, despite early opposition from some outside progressive groups. If every Republican senator opposes the nomination, Mr. Barr will need to secure the votes of every Senate Democrat, moderates and liberals alike.

Sarah Bloom Raskin, President Biden’s first nominee for the Fed’s top banking regulator, withdrew from consideration last month.

Photo: Pool/Getty Images

Sen. Sherrod Brown (D., Ohio), the chairman of the Senate Banking Committee, which will oversee the nomination, said he would support Mr. Barr.

Mr. Barr has ties to Sen. Elizabeth Warren (D., Mass.), who has previously praised him for his efforts to help set up the Consumer Financial Protection Bureau.

In recent days, Biden administration officials have started reaching out to Capitol Hill to gauge support for Mr. Barr’s nomination, people familiar with the discussions said.

Mr. Barr was assistant treasury secretary for financial institutions during the Obama administration. In that role, he helped craft the 2010 Dodd-Frank Act, a broad overhaul of financial regulations that followed the 2007-09 financial crisis. He served in multiple roles during the Clinton administration, including special assistant to then-Treasury Secretary Robert Rubin and deputy assistant Treasury secretary.

He is currently the dean of the University of Michigan’s public policy school.

Many Senate Republicans are likely to oppose Mr. Barr because of his role in creating the Consumer Financial Protection Bureau. Republicans and Wall Street firms have criticized the bureau as an instrument of runaway government regulation, with too much power over a significant slice of the economy. In 2009, Mr. Barr was confirmed to his role at the Treasury Department by a voice vote in the Senate without opposition.

In a statement, Sen.

Pat Toomey (R., Pa.), the top Republican on the Senate Banking Committee, raised concerns about Mr. Barr.

“Michael Barr has defended Dodd Frank’s big-bank bailout mechanism, which enshrined into law taxpayer bailouts of banks. He was also the primary author of the unconstitutional and unaccountable CFPB,” Mr. Toomey said, adding that he looked forward to considering the nomination.

Mr. Barr last year was a contender to be the Comptroller of the Currency, another top banking post, before skepticism from progressives stymied that bid. The eventual White House choice for that role, Saule Omarova, withdrew amid opposition from moderate Democrats. The agency remains without a Senate-confirmed leader.

Mr. Barr didn’t respond to requests for comment.

Saule Omarova, President Biden's nominee for Comptroller of the Currency, withdrew amid opposition from moderate Democrats.

Photo: TOM BRENNER/REUTERS

Some progressives have raised concerns about Mr. Barr’s previous ties to financial-technology firms Ripple Labs Inc. and LendingClub Corp. , arguing that they could conflict with his role as a regulator. More broadly, some critics believe the Obama administration’s response to the financial crisis did too little to help homeowners.

In 2015, Mr. Barr joined the advisory board of Ripple Labs, a cryptocurrency company now defending itself in court against charges filed in late 2020 by the Securities and Exchange Commission that it violated federal securities laws. He left the advisory board in 2017.

Ripple was started in 2012 by one of the creators of a cryptocurrency called XRP. According to the SEC’s lawsuit, the company and its founders initially controlled 100% of the supply of XRP. They then began selling the tokens to speculative investors to fund Ripple’s operations and in hopes of building a market for XRP that would make the cryptocurrency useful for purposes such as cross-border payments.

Ripple and its founders received legal advice as far back as 2012 that XRP could constitute a security under federal law, the SEC alleged. Nevertheless, they accelerated their sales of the token in the following years, raising at least $1.39 billion through the third quarter of 2020.

Ripple disputes the SEC’s allegation that XRP is an investment that falls under the agency’s jurisdiction.

A White House official said that Mr. Barr is proud of his work with Ripple, which consisted of consulting on how to lower the cost of remittances for low-income people and people in the developing world. At LendingClub, the official said, Mr. Barr advised the company on consumer protection, fair-lending practices and the Community Reinvestment Act.

Mr. Barr is “a believer in the supervision of all financial sectors, and he supports appropriate regulation for cryptocurrency and strong consumer protections,” the official added.

—Andrew Ackerman and Paul Kiernan contributed to this article.

Write to Andrew Restuccia at andrew.restuccia@wsj.com and Andrew Duehren at andrew.duehren@wsj.com