Defense Secretary Chuck Hagel has resigned, US officials said, ending nearly two years in the Pentagon's top job after a bruising mid-term election that undermined President Barack Obama's Democrats in Congress.

Hagel, who had struggled to improve his ties with Congress after a contentious 2013 confirmation hearing, submitted his resignation letter after lengthy discussions with Obama that began in October, officials said.

Obama accepted his resignation and would formally announce the decision.

"A successor will be named in short order, but Secretary Hagel will remain as Defense Secretary until his replacement is confirmed by the United States Senate," a senior Obama administration official said.

Top potential candidates to replace Hagel include Michele Flournoy, a former under secretary of defense, and Ashton Carter, a former deputy secretary of defense, who were rumoured to be contenders for Hagel's job before he was named.

Senator Jack Reed, Democrat of Rhode Island, is another possible contender.