The White House has presented to Congress a plan to close the Guantanamo Bay detention facility, one of the president's long-standing goals.
It wants to transfer the remaining 91 detainees to their home countries or to US military or civilian prisons.
But Congress is deeply opposed to terror suspects being held on US soil and is expected to block the move.
The prison costs $445m (£316m) to run annually and closing it was a 2009 promise from President Barack Obama.
He told reporters on Tuesday the prison undermined national security.
"This is about closing a chapter in our history," said Mr Obama. "It reflects the lessons we've learned since 9/11 - lessons that must guide our nation going forward."
But Republican presidential candidate Marco Rubio was scathing in his criticism, saying Guantanamo prisoners do not belong on US soil.
"These are literally enemy combatants," he said, adding he would ship terrorists straight to Guantanamo "to find out what they know".
It estimates the move would save up to $180m (£128m) a year in cost savings.
The president, who will complete his second and final term in January, said it was important not to pass the problem on to his successor.
"Keeping this facility open is contrary to our values. It undermines our standing in the world. It is viewed as a stain on our broader record of upholding the highest standards of rule of law.''
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