With McCain at his side, Giuliani called the Arizona Senator "the most qualified candidate to be the next commander in chief of the United States."
"This is a man prepared to be President of the United States at a time of great peril," Giuliani added.
McCain acknowledged his former rival as "my strong right arm and my partner."
"This man is a national hero and I'm honored by his friendship," he said.
The former New York City mayor went on to call for a "stronger and broader Republican Party."
"I'm hopeful we can secure his election very soon so we can unite our party and begin the process of uniting our nation," Giuliani said.
The announcement took place just after 6 p.m. ET at the Ronald Reagan Presidential Library and Museum in Simi Valley, Calif.
Giuliani vowed to campaign for McCain in whatever capacity he is asked.
"When I believe in a man like I do John McCain, this will become to me as important as my own election was," Giuliani said.
"I expect him to be fairly active for McCain," said Rep. Peter King, a New York Republican and adviser to Giuliani. "There is a real friendship and respect between the two," he said.
Once the Republican presidential front-runner, Giuliani suffered a debilitating defeat in Tuesday's Florida primary.
The former mayor finished a distant third to the winner, McCain, and close second-place finisher.
Speaking to supporters Tuesday night, Giuliani delivered a valedictory speech that was clearly more farewell than fight-on.
"I'm proud that we chose to stay positive and to run a campaign of ideas in an era of personal attacks, negative ads and cynical spin," Giuliani said as supporters with tight smiles crowded behind him. "You don't always win, but you can always try to do it right, and you did."
Tuesday's result was a remarkable collapse for Giuliani. Last year, he occupied the top of national polls and seemed destined to turn conventional wisdom on end by running as a moderate Republican who supported abortion rights, gay rights and gun control.
The results seriously decimated Giuliani's unconventional strategy, which relied heavily on Florida to launch him into the coast-to-coast Feb. 5 nominating contests.
But Florida proved to be less than hospitable. His poll numbers dropped and key endorsements went to McCain.
While Giuliani had hoped that his presidential campaign would serve as an example of how an unorthodox strategy could propel a candidate to his party's nomination, it instead appears more likely to be remembered as a cautionary tale, reports CBSNews.com's Brian Montopoli.
While his rivals were making headlines for their early victories, the former New York City mayor faced a flood of negative stories about his personal life and judgment, many tied to third wife Judith Nathan and disgraced longtime ally Bernard Kerik.
"Giuliani got a significant amount of bad press for about a week and a half for personal issues while everybody else was getting good press from the early primaries," said Tallahassee-based political consultant Brett Doster. "The negative personal stories combined with the resurgence of John McCain - the only guy in the field who had more credibility on national security - began to suck all the oxygen away from Giuliani's part of the aquarium." (