The 38-year-old Buttigieg's surprise decision was set to shake up the race this week when 14 states vote on "Super Tuesday."
It is expected to further boost the fortunes of Biden after the former vice president scored a resounding victory in South Carolina's primary on Saturday in the contest to see who faces President Donald Trump in November.
Biden has emerged as the chief moderate challenger to frontrunner Bernie Sanders, the firebrand leftist who has taken the race by storm and is looking to score big wins on Tuesday in states such as crown jewel California.
Buttigieg, a military veteran and former mayor of South Bend, Indiana, addressed supporters in his home town.
"The truth is that the path has narrowed to a close -- for our candidacy, if not for our cause," he said.
Buttigieg did not mention Sanders by name in his speech, but he has publicly stated he believes the 78-year-old senator's "inflexible" political approach would fail in a match-up against Trump.
"We need a broad-based agenda that can truly deliver for the American people, not one that gets lost in ideology," he said.
Buttigieg however stopped short of endorsing Biden or any other candidate.
Buttigieg emerged as a major player by narrowly winning the Iowa caucuses, earning widespread attention for his unflustered and professional approach in an often bitter Democratic nomination battle.
But his third place finish in Nevada and a worse showing in South Carolina confirmed he had struggled to build a broad coalition, including support from black voters -- a key Democratic demographic.
Biden's resounding victory Saturday in the first southern state to vote has thrust him back into contention, after miserable showings in the first three states.
With 48 percent of the vote in South Carolina, Biden more than doubled the 20 percent won by Sanders -- positioning him as the leftist senator's main rival.
"Just days ago the press and the pundits declared my candidacy dead," Biden told a crowd in Norfolk, Virginia, one of the states voting on Super Tuesday.
"Now, thanks to the heart of the Democratic Party in South Carolina, I'm very much alive," he said.
"On Tuesday here in Virginia, you could be the launching pad on the path to beat Donald Trump."
Sanders continues to hold poll leads in several Super Tuesday states -- including California.
"I think we've got a great chance to win in California, in Texas, in Massachusetts and a number of states," Sanders said Sunday on CBS.
He later congratulated Buttigieg on "running a strong and historic campaign" and angled for his supporters.
"I urge them to join us in the fight for real change in this country," Sanders tweeted.
In an already turbulent Democratic race -- which has gradually winnowed down a diverse and record-large field -- Biden's victory Saturday injected further uncertainty.
"The biggest question is whether this will slingshot Joe Biden into victory in some Super Tuesday states," said Larry Sabato, director of the Center for Politics at the University of Virginia.
The win, powered by support from black voters, was Biden's first in the race, but came at a crucial time, helping dispel doubts about the 77-year-old's energy level and appeal.
South Carolina brought some clarity: billionaire businessman Tom Steyer, who spent $23 million campaigning in the state, also dropped out of the race after taking just 11 percent of the vote.
Pressure is mounting on other trailing Democrats -- including Senator Elizabeth Warren and Senator Amy Klobuchar -- to follow Steyer's and Buttigieg's example and then swiftly throw their weight behind a frontrunner.
Warren, Klobuchar and billionaire Michael Bloomberg have all made it clear that they will stick around at least through Super Tuesday.
Buttigieg was feted by rivals including Bloomberg, another moderate, who has poured a staggering $500 million from his personal fortune into campaign advertising.
Buttigieg "ran a strong campaign that inspired audiences and made history," Bloomberg said.
Biden praised Buttigieg for his "trail-blazing campaign based on courage, compassion, and honesty."
Many Buttigieg supporters are unlikely to shift their backing to Bloomberg, whom Buttigieg openly accused of trying to "buy" his way into the presidential race.
As the race goes forward, money will loom ever larger.
Biden claimed he had been outspent 40-to-1 in South Carolina, but said he raised $10 million over the weekend.
Sanders has raised huge amounts in mostly small donations, including $46 million in February alone.
Biden argued on Sunday that as a centrist, he would be far more effective atop the party's ticket in November against Trump than Sanders, who calls himself a democratic socialist.
"Most Americans don't want a promise of a revolution. What they want is results," he said in Virginia.
Biden campaigns on Monday in Texas, Super Tuesday's second largest haul of the delegates who formally pick the party's nominee in July, while Sanders campaigns in Utah and in Klobuchar's home state of Minnesota.
