"Three months ago, I entered the race for President to defeat Donald Trump," Bloomberg said in a statement.
"Today, I am leaving the race for the same reason: to defeat Donald Trump – because it is clear to me that staying in would make achieving that goal more difficult," said the former New York mayor and billionaire, who had spent more than $500 million on his candidacy.
"I've always believed that defeating Donald Trump starts with uniting behind the candidate with the best shot to do it. After yesterday's vote, it is clear that candidate is my friend and a great American, Joe Biden," Bloomberg said in the statement.
"I've known Joe for a very long time. I know his decency, his honesty, and his commitment to the issues that are so important to our country – including gun safety, health care, climate change, and good jobs."
A campaign aide said the two candidates talked Wednesday morning, before the announcement of Bloomberg dropping out, according to NBC News.
Biden accepted Bloomberg's endorsement, saying in a tweet that the focus is on "defeating Donald Trump, and with your help, we're gonna do it."
Bloomberg's endorsement of Biden is a major boost for the former vice president's campaign.
Biden's efforts will get a lift from Bloomberg's extensive field staff and advertisements that have already been booked in future primary states. Biden will see an assist from Bloomberg's own technology company, Hawkfish. The campaign previously told NBC News that it will keep its operation going, even if Bloomberg was forced to drop out of the race.
Trump gloated about Bloomberg's departure from the contest.
"Mini Mike Bloomberg just 'quit' the race for President," Trump tweeted. "I could have told him long ago that he didn't have what it takes, and he would have saved himself a billion dollars, the real cost. Now he will pour money into Sleepy Joe's campaign, hoping to save face. It won't work!"
Bloomberg's embarrassing finish Tuesday night marked the first time he was on the ballot. Had he continued in the race, his candidacy might have taken away votes from Biden, a fellow moderate who's competing for the nomination with Sen. Bernie Sanders of Vermont. With his departure, there are now only four candidates in the race: Biden, Sanders, Sen. Elizabeth Warren of Massachusetts and Rep. Tulsi Gabbard of Hawaii.
Despite his massive, unprecedented spending, Bloomberg managed to win only American Samoa on Tuesday night when that territory and 14 states were up for grabs.
Warren's own poor performance Tuesday increased speculation that she will be the next big name to drop out of the race.
Warren's campaign manager Roger Lau said Wednesday that the campaign had fallen "well short of our viability goals and projections" on Super Tuesday, and "we are disappointed in the resullts."
"Elizabeth is talking with our team to assess the path forward," Lau wrote in a message to campaign supporters, which was published on Medium.com.
"She's going to take time right now to think through the right way to continue this fight. There's a lot at stake for this country and the millions of people who are falling further and further behind," Lau wrote. "This decision is in her hands, and it's important that she has the time and space to consider what comes next."
Bloomberg jumped into the campaign for the Democratic nomination in November, following weeks of teasing a potential bid. Earlier in 2019, Bloomberg had completely ruled out the possibility of running for president.
His late entry forced him to bypass early voting states of Iowa, New Hampshire, South Carolina and Nevada, to focus on delegate-rich Super Tuesday. The strategy didn't pay off.
Bloomberg launched his bid with a $31 million TV ad blitz, breaking former President Barack Obama's record campaign spending of $24 million on TV ads in one week. He ended up spending hundreds of millions of his own dollars on his campaign.
A senior Bloomberg aide said the campaign is canceling $7 million worth of ads originally scheduled to run in states that vote after Super Tuesday, including Florida, where Bloomberg campaigned heavily.
Progressive candidates Warren and Sanders, who have pushed for a wealth tax on millionaires and billionaires to fund programs like "Medicare for All," accused the centrist of trying to buy the nomination.
Bloomberg's net worth, according to Forbes, is about $60 billion.
Major ad spending helped him gained traction in national polls, putting him in third place at one point, behind Sanders and Biden.
But he took a drubbing on the debate stage in February when he was attacked by Warren for his alleged sexist behavior in the workplace. Bloomberg had not qualified for prior debates because he did not accept donor contributions and so did not meet the required threshold. The Democratic National Committee changed the rules in late January, paving the way for his participation.
Trump also made a habit out of mocking Bloomberg's 2020 bid, dubbing him "Mini Mike," a moniker that he used to taunt his potential rival as Super Tuesday results rolled in.
"The biggest loser tonight, by far, is Mini Mike Bloomberg," Trump tweeted Tuesday. "His 'political' consultants took him for a ride. $700 million washed down the drain, and he got nothing for it but the nickname Mini Mike, and the complete destruction of his reputation. Way to go Mike!"
Since leaving the mayor's office in 2013, the one-time Republican and former independent has doubled down on causes dear to the left. His anti-gun violence group Everytown for Gun Safety, battled the powerful National Rifle Association, helping numerous Democrats win elections at the national and state levels during the 2018 midterms and in more recent contests. He also launched Beyond Carbon, a coordinated campaign to fight climate change.
But he wasn't able to translate those actions into votes.
- Additional reporting by Dan Mangan