The announcement means a labor stoppage, which could have come as early as Friday, would be put off until July at the earliest. The three-member board's recommendations are non-binding.
"I appreciate that these dedicated individuals have agreed to devote their talent and years of experience working on labor-management disputes to help reach a swift and smooth resolution of this issue," Obama said in a statement released by the White House.
The emergency board will obtain final offers for settlement of the dispute from each side in the 60 days following its establishment. The board will then produce a report to the President that selects the offer that the Board finds to be the most reasonable, the White House said.
The MTA rejected the first board's recommendations. The agency says it remains hopeful an agreement can be reached.
Members of the Sheet Metal, Air and Transportation Union, the railroad's largest union, voted to strike in February. Smaller LIRR unions have approved similar votes to walk off the job.
LIRR unions have been without a contract since 2010.
The railroad carries 300,000 daily commuters.