Under state law, the successor had to come from the same party as the prior incumbent. An Abercrombie spokeswoman said the governor did not feel any political pressure from within his party to make the choice he made.
"While we are very disappointed that it was not honored, it was the governor's decision to make," Jennifer Sabas, Inouye's chief of staff, said in a statement. "We wish Brian Schatz the best of luck."
Selecting Hanabusa, 61, would have required a special election in Hawaii's 1st Congressional District. Last time that happened, Hanabusa lost to Republican Charles Djou because of a winner-take-all format that split votes between Democrats.
Abercrombie said the possibility of a special election was a factor, as well as Hanabusa's "key position" on the House Armed Services Committee. The governor said she was on her way toward establishing a senior position on that panel, and it's important for Hawaii — with its four-member delegation — to establish seniority in both chambers.
Schatz will serve until an election is held in 2014. He said he will run for re-election to try to keep the Senate seat until 2016 — the end of Inouye's original term — and would run again for Senate in 2016 if given the chance.
Hanabusa congratulated Schatz in a statement.
"Having served as chair of the Hawaii Senate Judiciary Committee when the succession law was passed, I fully respect the process and the governor's right to appoint a successor," she said.
Last week, when Abercrombie announced he would not seek the seat himself, his spokeswoman Louise Kim McCoy said Abercrombie intends to make his current post as Hawaii governor the last office of his political career.
Inouye would be "very happy" with the choice, Hawaii Democratic Party chairman Dante Carpenter said. Schatz has less experience than some older politicians in the Senate but he will be building seniority, which is "critical" to the state of Hawaii, he said.
"In the words of Sen. Dan Inouye — invoked more than once — seniority in the United States Congress is everything," Carpenter said.
Senate Majority Leader Harry Reid had urged Abercrombie to name Inouye's successor before the end of the year. The next Congress begins Jan. 3.
Democratic Rep. Mazie Hirono, D-Hawaii, was elected in November to succeed Akaka.
First in line to replace Schatz as lieutenant governor is Senate President Shan Tsutsui, who said he planned to discuss the prospect with his family before deciding.
Becky Bohrer can be reached on Twitter at http://twitter.com/bbohrerap.
Associated Press writer Audrey McAvoy contributed to this report.