President Reagan announced he is nominating Kenneth W. Dam, University of Chicago provost, to be the No. 2 man in the State Department under Secretary George Shultz.
Mr. Dam was chosen deputy secretary of state to replace Walter J. Stoessel, who is expected to retire from the Foreign Service at the end of the year.
The White House also announced its selections for two other top spots in the State Department. William Schneider Jr. is to be undersecretary of state in charge of coordinating security assistance programs, and W. Allen Wallis is to serve as undersecretary of state for economic affairs.
The third undersecretary's job, in charge of political affairs, will be retained by Lawrence Eagleburger, a career Foreign Service officer who was named to the job by Alexander Haig, outgoing secretary.