I am expecting my first baby soon and am trying to choose the godparents for her baptism. I know who I want; the problem is one of the persons is gay, although he is a practicing Catholic and knows his faith. Is it still wrong to choose this person as a g

If you mean that this person is actively living the homosexual lifestyle, then it is indeed wrong to choose this person to be a godparent. Regarding qualifications for baptismal sponsors, canon law states:

To be admitted to undertake the office of sponsor, a person must ... be a Catholic who has been confirmed and has received the Blessed Eucharist, and who lives a life of faith which befits the role to be undertaken (canon 874 §1 3°, Code of Canon Law, emphasis added).

Someone who currently engages in homosexual activity is not abiding by Catholic morals and therefore is not "liv[ing] a life of faith which befits the role to be undertaken." Assuming that your other choice for sponsor meets the qualifications for being a godparent, that person alone may be godparent. While two godparents are allowed (one of each sex), canon law states that one is sufficient (canon 873).