The Bears Ears National Monument and the Gold Butte National Monument will protect areas rich in Native American artefacts from energy drilling.
Some Republicans in those states are opposed to the move and say it amounts to a federal land-grab.
It comes as Mr Obama attempts to secure his environmental legacy.
Since the election of Republican Donald Trump as next US president, Mr Obama has moved to block new mining claims by Yellowstone National Park and new oil drilling in the vulnerable Arctic Ocean.
The Hawaiian-born president has protected more land and water acreage than any other US president.
But experts say it will be hard for Mr Trump to reverse it when he takes power.
Christy Goldfuss, managing director of the White House Council on Environmental Quality, said a sitting president cannot undo a previous president's national monument designations.
However, western lawmakers reacted with outrage to the announcement, which came as Congress was in recess for the holiday season.
They see it as government overreach and a block to potential energy development.
"This arrogant act by a lame duck president will not stand," said Utah Senator Mike Lee about Bears Ears, which is named for a set of rock formations.
In what Native American tribes view as a victory, the Bears Ears National Monument in Utah will cover 1.35 million acres in the Four Corners region.
It will protect the estimated 100,000 archaeological sites in the area including ancient cliff dwellings.
In Nevada, the 300,000-acre Gold Butte National Monument outside Las Vegas will protect rock art, fossils and recently discovered dinosaur tracks.
Navajo Nation President Russell Begaye praised the announcement.
"We have always looked to Bears Ears as a place of refuge," Mr Begaye said.
"The rocks, the winds, the land - they are living, breathing things that deserve timely and lasting protection."
President Barack Obama has unilaterally designated two new "national monument" nature preserves in the western US states of Nevada and Utah.