The announcement came Thursday following mass demonstrations that led to the ouster of the long-serving prime minister.
Army chief General Ashok Raj Sigdel held "consultations with related stakeholders and held a meeting with representatives of Gen Z" on Wednesday.
Military spokesperson said, referring to the loose umbrella title of the protest movement, without giving further details.
The army is seeking to restore order in the Himalayan nation of 30 million people, after the worst violence in two decades ousted the prime minister and left the parliament ablaze on Tuesday.
"Right now, Sushila Karki's name is coming up to lead the interim government — we are now waiting for the president to make a move," said Rakshya Bam, who was among those attending the meeting.
"We discussed with the army chief about the future," she told AFP.
"The conversation was about how we can move forward, keeping the peace and security of the country."
Karki, 73, an academic and Nepal's first female Supreme Court chief justice, has told AFP that "experts need to come together to figure out the way forward", and that "the parliament still stands".
But others warned the choice of the protesters — who are not one single party — was far from unanimous.
In a virtual meeting attended by thousands on the online social platform Discord, young people discussed their varied agendas — and debated who should represent them.
There were conflicting arguments and several names proposed.
"There are divisions," journalist Pranaya Rana said.
"It is natural in a decentralised movement like this that there are going to be competing interests and competing voices."
Soldiers patrolled the streets of the capital for a second day on Thursday, which appeared to be quiet, with multiple army checkpoints set up along the streets.
Demonstrations began on Monday in Kathmandu against the government's ban on social media and over corruption.
But they escalated into an outpouring of rage nationwide, with government buildings set on fire after at least 19 people were killed in a deadly crackdown.