44-year-old Haley, considered a rising star in the Republican Party, is the first female appointment to a cabinet-level post by President-elect Donald Trump.
Born Nimrata "Nikki" Randhawa, Haley brings both racial and gender diversity to Trump's appointments, which so far have uniformly consisted of white males.
She has already carved out a legacy for herself, serving as the first minority and female governor of South Carolina, a deeply conservative state with a long history of racial strife.
Her re-election win in 2014 also marked the largest margin of victory for a South Carolina gubernatorial candidate in 24 years.
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Prior to becoming the state's chief executive, she served six years as a member of the state's House of Representatives.
Haley was critical of Trump during the primary campaign and had backed Senator Marco Rubio in the Republican primary. However, before the general elections, she switched her position, saying she would vote for Trump.
Her views on various US military and national security matters usually fall within the Republican Party's hawkish mainstream, US media says.
She would be the first ever Indian-American Cabinet rank official in any administration. The Cabinet position would require confirmation by the Senate.
Last week, Haley was elected Vice Chair of the powerful Republican Governors Association for the year 2017.
After the November 8 general elections, Republican Governors are now in charge of 33 States, something that has not happened in 94 years.
In an op-ed on CNN, South Carolina's popular columnist Issac Bailey recently wrote Haley is perfectly positioned to do what many believed Hillary Clinton would have.
"Haley could be a future political titan in a political party that finds itself with unprecedented levels of national power and internal chaos," Bailey wrote.
Haley could give Trump something to brag about and his supporters, desperate to deny the bigotry upon which their hero rose to national political prominence, something to point to, his willingness to appoint a woman from a minority group who did not cow to him during the election cycle, Bailey said.