New Hampshire Gov. John Lynch (D) announced Tuesday that he will appoint Bonnie Newman to fill the seat of Sen. Judd Gregg (R-N.H.), provided he is confirmed as the next Commerce secretary.

Newman, a former Gregg chief of staff, is viewed as a temporary placeholder and is not expected to run for a full Senate term — setting up a hotly contested open-seat race in 2010.

“I’m humbled, I’m honored and I’m grateful for the governor’s confidence.” Newman said at an afternoon news conference.

Even before Newman’s appointment was made on Tuesday, word circulated that Rep. Paul Hodes (D-N.H.), who had been considering running against Gregg in 2010, will announce his Senate candidacy later this week.

Rep. Carol Shea-Porter (D-N.H.) is also mentioned as a possible candidate, but Hodes is widely viewed among party strategists as the stronger nominee.

Among Republicans, former Sen. John Sununu (R-N.H.) is at the top of the list of possible contenders. Sununu was ousted from office in 2008 by now-Sen. Jeanne Shaheen (D).

Gregg brokered a deal whereby he would only agree to take the Commerce job if Lynch’s appointment would not change the partisan makeup of the Senate.

While Newman will caucus with Republicans, she has a much more moderate profile than Gregg.

At the announcement in Concord, Newman described herself as a “reasonable Republican.”

“Some of you might call me a moderate Republican, and I think that would be true,” she said.

Newman grew up in Massachusetts and first moved to the Granite State in 1969 to become assistant dean of students at the University of New Hampshire. She recently served as the interim president of the school.

She described the current circumstances as “surreal,” and she recalled her first trip to Washington, D.C., just after graduating from high school and the emotions she felt when she looked up at the Capitol Dome.

“This is an American dream beyond anything that I could have imagined,” she said.