Esper is the third person the Trump administration has named as its pick for Army secretary after the first two picks both dropped out — one over financial vetting issues and the other amid a backlash over controversial comments on LGBT issues.
Esper is a defense lobbyist for Raytheon and has been head of the company's government relations arm since 2010.
His selection was first reported by the Washington Examiner
Senate armed services committee Chairman John McCain, who will handle Esper's confirmation process, has urged the Trump administration to put forward Pentagon nominees, but he could be wary of Esper's industry ties.
During his confirmation hearing, McCain slammed new Deputy Defense Secretary Patrick Shanahan, a former Boeing executive, over his ties to industry, and he said he's concerned generally about defense executives taking senior jobs at the Pentagon.
McCain is currently recovering in Arizona from surgery to remove a blood clot above his left eye, and it's likely Esper's confirmation won't occur until after the congressional August recess.
McCain and other lawmakers have expressed concerns at the slow pace the administration has filled the top Pentagon positions surrounding Defense Secretary Jim Mattis, and the Army secretary has been a particular trouble spot.
Trump's first pick, billionaire Florida Panthers owner Vincent Viola, withdrew from consideration in February
over problems untangling his business ties.
Trump's second choice for Army secretary, Tennessee state legislator Mark Green, withdrew in May
over a backlash from his controversial comments on LGBT issues and Islam.
Trump's first pick for Navy secretary, Philip Bilden, also withdrew due to financial issues, though Richard Spencer is likely to be confirmed by the Senate soon for that post.
Air Force Secretary Heather Wilson was confirmed in May.
Esper is a retired Army lieutenant colonel and West Point grad, and his military career included a tour during the first Gulf War.
He has had a lengthy career in both government and the business world.
Before taking his job at Raytheon, Esper worked at the US Chamber of Commerce, the National Institute for Public Policy and the Aerospace Industries Association.
In the George W. Bush administration, he served as deputy assistant secretary for negotiations policy, where he was responsible for arms control, nonproliferation and United Nations matters. Esper also had a stint on Capitol Hill, working for former Senate Majority Leader Bill Frist and the house armed services committee.
Esper did not respond to an email seeking comment.