The decision comes after the Trump administration concluded a criminal investigation into sitting Fed Chairman Jerome Powell, prompting Republican Senator Thom Tillis to signal on Sunday that he would stop blocking a go-ahead for Warsh as the new Fed chairman.
Previously, Tillis - who has a casting vote on the Banking Committee - said he would not let Warsh through as Tillis believed the Trump administration's investigation into Powell threatened the Fed's independent position.
After the committee decision, the entire Senate will vote on the nomination, but Warsh is expected to receive support from the Republican majority.
Powell's term as Fed chairman expires on May 15, but he can remain as a member of the central bank until January 2028.
