San Francisco Federal Reserve Bank President Janet Yellen is a leading contender to be nominated by President Barack Obama as vice chair of the central bank, a senior administration official said on Friday.

Sarah Raskin, the top banking regulator for the state of Maryland, and Peter Diamond, a Massachusetts Institute of Technology economist, are also under consideration for Fed board vacancies, the official said.

Yellen would replace Donald Kohn, a 40-year veteran of the Fed who announced earlier this month that he would retire on June 23. The nomination for the four-year term as the Fed's No. 2 would be subject to Senate approval.

A separate source familiar with the process said on Thursday Obama plans to nominate Yellen. The administration official who spoke on Friday did not say a definite decision had been made.

If picked and confirmed, she would help steer the Fed out of an unprecedented level of monetary stimulus and defend the Fed's regulatory capabilities before a skeptical Congress that faults the central bank for lapses that contributed to a financial crisis.

Kohn's impending departure means that Obama has three seats to fill on the seven-member Fed board.

The source said top candidates had been identified for each of spot, but all selections, including Yellen's, are subject to completion of a vetting process.

The source said the administration also was vetting other candidates in case any of its top picks fell through.

Yellen has an impressive set of credentials as a macroeconomist and she is a leading contender for the Vice Chair nomination, the administration official said.

Sarah Raskin and Peter Diamond are also under consideration for vacancies, the official said.

(Reporting by Matt Spetalnick and Caren Bohan; Editing by Alan Elsner)