The facility "undermines" security and serves as a recruitment tool for terrorists, the US president said. Under Obama's plan, the remaining detainees would be transferred to American soil, a move Republicans reject.
US President Barack Obama said the military detention facility at Guantanamo Bay "undermines" national security.
"For many years it's been clear that the detention facility at Guantanamo Bay does not advance our national security - it undermines it," Obama told reporters at a press conference.
The president's plan is an attempt at fulfilling a campaign promise to close the controversial detention center opened under former President George W. Bush.
The facility was used to hold suspected terrorists following attacks that took place September 11, 2001, the majority of whom were never charged while in detention.
It also gained widespread notoriety after reports emerged that authorities subjected detainees to torture during interrogation sessions.
In 2015, the prison population at the military detention center dropped to its lowest since it was opened in 2002, with only 91 suspects being held as of February.
Under the proposed plan, the remaining detainees would be transferred to facilities on American soil, a plan that has been rejected by several Republican lawmakers in Congress.
At least 35 of the remaining detainees have been deemed eligible for transfer by "relevant national security departments and agencies," according to the proposal.
"We'll continue to use all legal tools to deal with the remaining detainees still held under law of war detention," Obama said.
"We're going to work with Congress to find a secure location in the US to hold remaining detainees," the US president added.
Republican lawmakers - who maintain a majority in both the House of Representatives and the Senate - have vowed to block any legislation that transfer "terrorist detainees" to the US.
House speaker Paul Ryan immediately lashed out at Obama's plan, saying it "fails" to outline where the remaining Guantanamo detainees would be held.
"His proposal fails to provide critical details required by law, including the exact cost and location of an alternate detention facility."
"It is against the law - and it will stay against the law - to transfer terrorist detainees to American soil. We will not jeopardize our national security over a campaign promise," Ryan added.
It is unclear whether Obama will use his executive powers to circumvent Congress to implement his plan to close the controversial prison camp.