Federal law prohibits agencies from taking actions that may adversely affect critical habitat and interfere with polar bear recovery.
Assistant Interior Secretary Tom Strickland called the habitat designation a step in the right direction to help polar bears stave off extinction, while recognizing that the greatest threat to the bear is the melting of Arctic sea ice caused by climate change.
"As we move forward with a comprehensive energy and climate strategy, we will continue to work to protect the polar bear and its fragile environment," Strickland said at a news conference.
The total area proposed for critical habitat designation would cover about 200,541 square miles -- about half in the rugged Chukchi Sea off Alaska's northwest coast. About 93 percent of the area proposed for the polar bear is sea ice, with the remaining 7 percent made up of barrier islands or land-based dens of snow and ice.
Designation as critical habitat would not, in itself, bar oil or gas development, but would make consideration of the effect on polar bears and their habitat an explicit part of any government-approved activity.
Thursday's announcement starts a 60-day public comment period, with a final rule expected next year. Interior faces a June 30 deadline for critical habitat designation under terms of a settlement agreement between the government and three environmental groups.
The Bush administration last year declared polar bears "threatened," or likely to become endangered. The May 2008 order by then-Interior Secretary Dirk Kempthorne cited the bear's need for sea ice, the dramatic loss of such ice in recent decades and computer models that suggest sea ice is likely to recede further in the future.
Environmental groups hailed the habitat announcement, but noted that it came in the same week that the Interior Department approved a plan by a subsidiary of Royal Dutch Shell to drill exploratory wells on two leases in the Beaufort Sea off Alaska's north coast.
The proposed drilling sites are within the area proposed for critical habitat designation.
"If polar bears are to survive in a rapidly melting Arctic, we need to protect their critical habitat, not turn it into a polluted industrial zone," said Brendan Cummings, a lawyer with the Arizona-based Center for Biological Diversity, which filed a lawsuit in the polar bear case.
Cummings called the Interior Department "schizophrenic" -- on the one hand declaring its intent to protect polar bear habitat in the Arctic, yet at the same time "sacrificing that habitat to feed our unsustainable addiction to oil."
The announcement comes one day after the state of Alaska filed a new complaint in its effort to overturn the listing of the polar bear as threatened under the Endangered Species Act.
Former Gov. Sarah Palin filed suit last year, saying that Interior did not respond to the state's concerns in a timely manner before listing the polar bears as threatened. State officials say the listing could cripple offshore oil and gas development in the Chukchi and Beaufort seas, which provide prime habitat for the polar bears.
Gov. Sean Parnell, who succeeded Palin upon her resignation last summer, said the Endangered Species Act was being used as a way to shut down resource development along Alaska's northern coast. Parnell said he does not intend to let that happen.
Environmental groups monitoring the Arctic have long complained that federal regulators routinely grant permits for petroleum exploration without adequately considering consequences for whales, polar bears, walrus and other marine mammals. They say boats, drilling platforms and aircraft will add to bears' stress by causing them to flee and expend more energy.
Conservation groups also say oil companies have not demonstrated they can clean up an oil spill in broken ice. Cleanup off Alaska's coast could be slowed by extreme cold, moving ice, high wind and low visibility.
Andrew Wetzler of the Natural Resources Defense Council said designation of critical habitat is a powerful tool to protect threatened species, but said more must be done to save the polar bear from extinction.