The 1,400-square-kilometre area is located approximately 13 kilometres off the north-east US coast, close to Atlantic City.
The DoI and the Bureau of Ocean Energy Management (BOEM) identified the area following consultation with local groups and public bodies. The lease will comprise of two areas: the North Lease area, which will be 746 square kilometres, and the South Lease area, totaling 649 square kilometres.
Research by the US Department of Energy's National Renewable Energy Laboratory suggests the area could have a total capacity of up to 3.4GW.
This announcement starts a 60-day period ending on 19 September, during which the public can comment and companies can submit their packages to qualify to bid for the lease. The date of the lease sale will be set after the September deadline.
The nearby town of Paulsboro could be considered as the site to serve the New Jersey offshore project. Last year, government and state officials met to discuss using the port as an area to construct converter platforms to be shipped to Altantic offshore wind projects.
This week, it was announced a new multi-purpose marine terminal would be built at the port.
The US does not yet have any installed commercial offshore wind capacity, but BOEM and the DoI have awarded five offshore leases on the east coast. There are also upcoming auctions for areas off Maryland and Massachusetts.
The projects would be connected via the New Jersey Energy Link, part of the planned Atlantic Wind Connection offshore high voltage transmission line.