His endorsement came after meeting Vermont Senator Bernie Sanders who has been battling Mrs Clinton for the nomination.
Speaking in a video tweeted out by Mrs Clinton, Mr Obama said she may be the most qualified person “ever” for the role of president.
Massachusetts Senator Elizabeth Warren also endorsed Mrs Clinton on Thursday.
“I am ready to get in this fight and work my heart out for Hillary Clinton to become the next president of the United States,” she told MSNBC, “and to make sure that Donald Trump never gets any place close to the White House.”
President Obama and Mrs Clinton are set to start campaigning together soon.
“I want those of you who’ve been with me from the beginning of this incredible journey to be the first to know that ‘I’m with Her.’ I am fired up and cannot wait to get out there and campaign for Hillary,” Mr Obama said in the video.
“Secretary Clinton and Senator Sanders may have been rivals during this primary, but they’re both patriots who love this country and they share a vision for the America that we all believe in.”
The two ran against one another for the Democratic nomination in 2008 and Mr Obama later made Mrs Clinton secretary of state.
Speaking to Reuters following the endorsement, Mrs Clinton said Mr Obama’s endorsement “means the world”.
“It is absolutely a joy and an honour that President Obama and I, over the years, have gone from fierce competitors to true friends,” she said.
Presumptive Republican nominee Donald Trump tweeted that Mr Obama’s endorsement means he wants “four more years of Obama” and “nobody else does”.