If confirmed, Flournoy would face a future that is expected to involve shrinking Pentagon budgets and potential military involvement in the distribution of a coronavirus vaccine.
Democrats have long sought to name a woman to the top post in a department that didn't open all combat jobs to female service members until about five years ago.
Flournoy had been the expected choice of Hillary Clinton if she had won the 2016 election. Her name surfaced early as a front-runner for Biden's Cabinet, said officials who spoke on condition of anonymity to discuss personnel matters.
Seen as a steady hand who favours strong military cooperation abroad, Flournoy, 59, has served multiple times in the Pentagon, starting in the 1990s and most recently as the undersecretary of defence for policy from 2009 to 2012.
She serves on the board of Booz Allen Hamilton, a defence contractor, which could raise concerns from some lawmakers.
But her moderate views would likely ensure wide bipartisan support in a position that requires Senate confirmation.
Few other names have been mentioned, though former Department of Homeland Security chief Jeh Johnson was listed as a possible choice at one point.
Choosing a woman would be consistent with Biden's pledge to have a diverse Cabinet.
She has been outspoken on American foreign and defence policy, particularly over the past year.
She favours closer international cooperation after four years of a Trump White House that touted an "America First" policy and was more distrustful and critical of allies.
"Whoever the next president is," she said in March, "whether it's a second Trump term or Vice President Biden or whoever it is, one of the top agenda items is going to try to, I think, repair some of that perception" that America may no longer be a reliable partner.
"But I don't think it's going to be easy or happen overnight. I think it's going to take a lot of work over a number of years to recover that trust and that standing."
She has also cautioned against drastic, immediate changes.
"One of the most dangerous tendencies is for — after a change of administration, particularly when there's a change of party — for the new team to come in and use the term 'repudiation'.
"But to come in and assume that everything their predecessors did was wrong, you know, they throw the baby out with the bathwater, basically, and they overcorrect in another direction," she said in a Hudson Institute forum.
Arnold Punaro, a retired Marine two-star general and former staff director of the Senate Armed Services Committee under then-Democratic Sen. Sam Nunn of Georgia, said recently he regards Flournoy as "incredibly well-qualified" to lead the Pentagon.
The Defence Department is one of three Cabinet agencies — the others being Treasury and Veterans Affairs — that have never been led by a woman.
Some of the 28 men who have held the top defence job since it was created in 1947, including three who served in Trump's administration — Jim Mattis, Esper and current acting Secretary Christopher Miller — have been military veterans. Flournoy did not serve in the military.
Like Mattis and Esper, Flournoy views China as the most significant long-term challenge to American predominance on the world stage.
In July, she said the United States is losing its military technological advantage over key competitors like China and reversing this trend must be the Pentagon's top priority.
She has, however, also warned against abandoning the Middle East and advocates "more modest levels of continuous presence" there.
As an example, she has backed a limited role in Afghanistan that focuses more on countering the terror threat and less on rebuilding the country.
"We want to reduce our commitment, but we want to do it in a way that's smart and that safeguards our interests in the process," she said in March about Afghanistan, adding that she hopes "we don't just cut and run".
Trump has pushed for a full troop withdrawal from Afghanistan by the end of the year, but so far the Pentagon has no orders to do that.
On North Korea, she said in an October online forum that while nuclear disarmament should remain the ultimate goal, she finds it "hard to see" Kim Jong Un agreeing to give up all his nuclear weapons, which she said he sees as his regime's "survival card".
On Iran, Flournoy has argued for a revised approach of deterring the Islamic Republic by breaking the familiar pattern of sending more American forces to the Gulf in response to Iranian provocations, as the Trump administration did in May 2019 after what it called credible threats to US interests in the region.
Flournoy is a co-founder of Westexec Advisors, a consulting firm that provides advice and geopolitical risk analysis to corporate clients.
She works with a mixture of former senior government officials — including Antony Blinken, a former deputy secretary of state and currently Biden's top foreign policy adviser — and military experts such as retired Army General Vincent Brooks, who led US forces in Korea until 2019.
In 2007, Flournoy helped create a think tank, the Centre for a New American Security.
