WASHINGTON - PRESIDENT-elect Barack Obama has chosen retired General Eric K. Shinseki to be the next Veterans Affairs secretary, turning to a former Army chief of staff once vilified by the Bush administration for questioning its Iraq war strategy.

Mr Obama will announce the selection of Gen Shinseki, the first Army four-star general of Japanese-American ancestry, at a news conference on Sunday in Chicago. He will be the first Asian-American to hold the post of Veterans Affairs secretary, adding to the growing diversity of Mr Obama's Cabinet.

'I think that General Shinseki is exactly the right person who is going to be able to make sure that we honour our troops when they come home,' Mr Obama said in an interview with NBC's Meet the Press to be broadcast on Sunday.

NBC released a transcript of the interview after The Associated Press reported that Gen Shinseki was Mr Obama's pick.

Gen Shinseki's tenure as Army chief of staff from 1999 to 2003 was marked by constant tensions with Defence Secretary Donald Rumsfeld, which boiled over in 2003 when Gen Shinseki testified to Congress that it might take several hundred thousand US troops to control Iraq after the invasion.

Mr Rumsfeld and his deputy, Mr Paul Wolfowitz, belittled the estimate as 'wildly off the mark' and the army general was forced out within months. But Gen Shinseki's words proved prophetic after President George W. Bush in early 2007 announced a 'surge' of additional troops to Iraq after miscalculating the numbers needed to stem sectarian violence.

Mr Obama said he selected Gen Shinseki for the VA post because he 'was right' in predicting that the United States would need more troops in Iraq than Mr Rumsfeld believed at the time.

'When I reflect on the sacrifices that have been made by our veterans and, I think about how so many veterans around the country are struggling even more than those who have not served - higher unemployment rates, higher homeless rates, higher substance abuse rates, medical care that is inadequate - it breaks my heart,' Mr Obama told NBC.

Gen Shinseki, 66, will take the helm of the government's second largest agency, which has been roundly criticised during the Bush administration for underestimating the amount of funding needed to treat thousands of injured veterans returning from Iraq and Afghanistan.

Thousands of veterans endure six-month waits for receiving disability benefits, despite promises by current VA Secretary James Peake and his predecessor, Mr Jim Nicholson, to reduce delays. The department also is scrambling to upgrade government technology systems before new legislation providing for millions of dollars in new GI benefits takes effect next August.

Mr Obama's choice of Gen Shinseki, who grew up in Hawaii, is the latest indication that the president-elect is making good on his pledge to have a diverse Cabinet.

In Mr Obama's eight Cabinet announcements so far, white men are the minority with two nominations - Mr Timothy Geithner at Treasury and Mr Robert Gates at Defence. Three are women - Ms Janet Napolitano at Homeland Security, Ms Susan Rice as United Nations ambassador and Mrs Hillary Rodham Clinton at State. Ms Rice and Mr Eric Holder at the Justice Department are African American, while Mr Bill Richardson at Commerce is Latino.

Gen Shinseki is a recipient of two Purple Hearts for life-threatening injuries in Vietnam.

Upon leaving his post in June 2003, Gen Shinseki in his farewell speech sternly warned against arrogance in leadership.

'You must love those you lead before you can be an effective leader,' he said. 'You can certainly command without that sense of commitment, but you cannot lead without it. And without leadership, command is a hollow experience, a vacuum often filled with mistrust and arrogance.'

Gen Shinseki also left with the warning: 'Beware a 12-division strategy for a 10-division army.' -- AP