"I think the best chance for the renewal I want to see in Ontario and in the party, and the person who is better able to get us there than I am, is my friend Kathleen Wynne," Murray told cheering Wynne supporters.
"And because I believe that renewal is more important than anything else, and because I simply believe she is the best person to be premier of Ontario, she has my full and unqualified support."
Murray's decision, which came just two days before Liberal delegates are selected for the leadership convention, leaves six candidates in the race to replace Dalton McGuinty.
The former colleges minister said he felt strongly that he had raised important ideas during the past few months since McGuinty's surprise announcement in mid-October that he would resign in January.
"I started down this path because I wanted to bring a sense of renewal, new energy, new ideas and new people, but I’ve always said you have to pause in life sometimes to never put your own political career ahead of ideas and public service," he said.
"While I’m proud of my team and the efforts we’ve made, it’s very clear to me that Kathleen Wynne embodies much of the ideas, compatible values and incredible capacity to bring people together and to lead, a woman who’s not afraid to make tough decisions.
Wynne called Murray "a class act," and said he would play a "senior role" in her cabinet if she becomes premier.
"I know this is a very hard moment for you, because you’ve put your heart and soul into this, and I’m very grateful that you’re coming and we’re going to be able to work together," said Wynne.
"I need his ideas and Glen brings fantastic imagination and experience that I need on my team."
Wynne said the major impact Murray's decision would have on the campaign was showing people how she likes to work as a political leader.
"I’m going to reach out to people, going to work with them, and as we come to agreement we’re going to move forward together," she said.
"That is how I have worked as a politician, and that’s what’s happening here."
Murray, the former mayor of Winnipeg, joked about his inability to drum up financial and delegate support during Wednesday night's final debate among the leadership candidates.
He admitted that he didn't have a lot of money _ had "tapped out every friend" _ and could barely afford another campaign pamphlet, but insisted Thursday his decision to withdraw was not motivated by a lack of cash but by his close relationship with Wynne.
"Our fundraising has been going well, so no that wasn’t the basis of it," he said.
"Quite frankly, we ended up talking about policies and ideas and how do we deal with budget deficits and all kinds of really exciting things that just make our families cringe."
Workers for leadership hopeful Charles Sousa say he quickly sent out voice mail messages Thursday morning to Murray's potential supporters, urging them to back the former labour minister's campaign to replace McGuinty as Ontario premier.
Murray, 55, who was fist elected in a 2010 byelection in Toronto-Centre, had virtually no support among his fellow Liberal caucus members and little among would-be delegates to the leadership convention in Toronto Jan. 25-26.
Wynne was believed to have the most potential delegates heading into selection meetings across the province this weekend, but many observers predict Sandra Pupatello _ who has more caucus support than Wynne _ will take the most votes on the first ballot at the convention.
Former cabinet minister John Wilkinson, who was defeated in the 2011 election, was named as Wynne's campaign co-chair Thursday, joining Health Minister Deb Matthews.
"That kind of support is extremely important to me and I appreciate both Deb and John being there," said Wynne. "They’ve got my back. I can just feel it."
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