In a news conference Sunday, Cere said he was dropping out after failing to raise a $10,000 payment he needed to stay in the race.
He described himself as "very proud and happy" with his campaign, and said he left without regrets.
"With fewer resources, we had a campaign that really carried," he said.
Cere encouraged his supporters to vote for either Martine Ouellet or Alexandre Cloutier in this week's leadership ballot, adding that he would vote for Ouellet.
The third candidate, Pierre Karl Peladeau, is the front-runner to succeed Pauline Marois as party leader.
Last week, Cere accused Peladeau of using angry words to intimidate himself and other candidates. Peladeau shrugged off the accusations, telling reporters in Quebec City that he sometimes gets passionate.
Cere said Sunday there was "nothing personal" in his decision to endorse Peladeau's rivals. Instead, he said his decision was motivated by concerns over what he described as Peladeau's conflict of interest arising from the fact Peladeau is the controlling shareholder of media company Quebecor.
"I don't think he is able to lead the Parti Quebecois at present," Cere said, adding that Peladeau had not put up sufficient firewalls to separate his interests.
In an interview with The Canadian Press, Ouellet thanked Cere for his support.
"I want to congratulate Pierre and his team on a good campaign, and I thank him for his support of my candidature," she said.
Ouellet said she was confident of getting enough votes to force a second round of voting, which will happen if no candidate receives a margin of 50 per cent plus one.
Cloutier took to Twitter to congratulate Cere for the ideas and questions he brought to the PQ leadership campaign.
Party members will vote for a new leader beginning May 13, with the results of the first round expected after voting concludes Friday afternoon.
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