The inquiry was announced by Attorney General Eric Holder after a grand jury decided against charging the officer.
That decision prompted street protests in New York. Activists have called for a march in Washington next week.
President Barack Obama said the case “speaks to larger issues”.
The decision not to charge the officer came just a week after another grand jury, in Ferguson, Missouri, decided not to charge a white police officer who shot and killed black teenager Michael Brown.
The ruling into the death of Michael Brown in the St Louis suburb of Ferguson sparked riots and protests across the country.
Eric Garner, 43, was stopped on a street in New York on July 17 on suspicion of selling loose, untaxed cigarettes.
The case drew attention when mobile phone video of police officer Daniel Pantaleo arresting Eric Garner surfaced.
The video shows a lengthy exchange between Eric Garner and police, during which he verbally refuses to be handcuffed.
Several officers then move to restrain Eric Garner, with Daniel Pantaleo holding him by the neck.
The detainee, who is asthmatic, can be heard shouting: “I can’t breathe!”
That cry was echoed by protesters who marched through the streets in New York late on Wednesday, occasionally disrupting traffic. They chanted “I can’t breathe!” and “Hands up – don’t choke!”
Attorney General Eric Holder announced “an independent, thorough, fair and expeditious” investigation into potential civil rights violations in the case.
The justice department, he said, would conduct a “complete review” of material gathered in the local investigation.
“All lives must be valued – all lives,” Eric Holder added.
Urging demonstrators to remain peaceful, he said he was continuing a review of how to heal a “breakdown in trust” between police and communities.
After the grand jury decision President Obama said: “When anybody in this country is not being treated equally under the law, that is a problem, and it’s my job as president to help solve it.”
Eric Garner family lawyer Jonathon Moore said he was “astonished” by it.
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