A 27-year veteran of the agency, Clancy is a former head of the presidential protection detail, responsible for safeguarding Obama and his predecessors.
White House spokesman Josh Earnest said yesterday "based on his long track record with the agency," Clancy had "a lot of credibility built up inside the agency."
A four-member government panel had suggested that the service needed a leader from outside to clean house after a mentally disturbed veteran in September scaled the fence and burst into the White House carrying a knife.
The White House said that Clancy, despite being an insider, had a "candid, clear-eyed assessment" of what needs to be done to reform the Secret Service.
The last head of the agency, Julia Pierson, resigned after the fence-jumping incident.
She had initially been appointed to clean up the service after a dozen agents were found to have hired prostitutes during a 2012 presidential trip to Colombia.