Friedman was one of Trump's key advisers during the election campaign regarding US-Israeli relations, EFE news quoted a statement as saying.
"The future ambassador has been a long-time friend and trusted adviser to me. His strong relationships in Israel will form the foundation of his diplomatic mission and be a tremendous asset to our country as we strengthen the ties with our allies and strive for peace in the Middle East," Trump said in the statement.
All US ambassadors nominated by the President must be confirmed by the Senate.
Friedman, 57, is currently a founding partner of a law firm having about 300 attorneys and which for the last 35 years has specialised in litigation and bankruptcies, according to the official communique.
The statement says that, with this nomination, Trump is reaffirming his commitment to improve relations between the two countries and guarantee that there will be "extraordinary" strategic, technological, military and intelligence cooperation between Washington and Tel Aviv.
In Trump's administration, after his Janaury 20 inauguration, the US-Israeli relationship will be a model of cooperation and respect, the statement adds.
Friedman said in the statement announcing his nomination that he is looking forward to working "from the US Embassy in Israel's eternal capital, Jerusalem".
The President-elect has said he will move the US embassy from Tel Aviv to Jerusalem, although Washington -- along with many other countries around the world -- does not currently recognise Jerusalem as the Israeli capital.
The Israeli daily Haaretz, in reporting on the nomination, said that Friedman, an Orthodox Jew, is a columnist for two Israeli right-leaning media outlets: Arutz Sheva and The Jerusalem Post.
According to Haaretz, his positions are farther to the right than those of Israeli Prime Minister Benjamin Netanyahu.