Bernard Drainville, realizing that his chances of succeeding Pauline Marois had all but vanished, confirmed the switch at a news conference in which he referred to Peladeau several times as a team player.
"I said from the very beginning that I was in the race to win and those who know me know I always play to win,'' said Drainville, perhaps best known in English Canada as the architect of the PQ's doomed values charter.
"I gave everything I had and my team gave everything they had. But you have to face facts. In the last few weeks, the vote crystallized and Pierre Karl managed to forge a clear majority.
"Knowing that, it would make no sense to continue. Because, to keep going, I would have had to mount a hard campaign, very hard, too hard. And you can't be too egotistical in something like this. You have to think of the team, you have to think of our party and you have to think of our cause."
Drainville, 51, said he and Peladeau discussed several issues in meetings on Tuesday and Wednesday, including the ever-thorny independence question.
He said they agreed to consult PQ members at least six months before the election in the fall of 2018 to ask them about the party's approach to sovereignty and about whether there should be an independence referendum in the first mandate of a PQ government.
"So members will have a say in that decision and Pierre Karl agrees with that," Drainville added.
Peladeau said he is happy to have his caucus colleague on his side and that their programs are similar in many areas, including on the national issue.
"We have a common objective — to achieve sovereignty,'' he told a later news conference.
''The rank and file are at the base of this party and it's undeniable that that will continue. We can't make such an important decision, on Quebec independence, without consulting them.''
Drainville had been quite vocal as of late in his criticism of Peladeau, firing a particularly pointed barb at him after a leadership debate last week.
''Beware of this idea that there's going to be a saviour coming down from the sky and achieving independence in no time flat,'' he told reporters.
Peladeau dismissed the comment as ''quite natural in the context of a debate.''
Drainville's withdrawal leaves three other leadership candidates besides Peladeau: ex-cabinet ministers Alexandre Cloutier and Martine Ouellet and Pierre Cere, a spokesman for a group that represents the unemployed.
Recent opinion polls had placed Drainville in third place behind Quebecor's controlling shareholder and the second-placed Cloutier.
The winner will be chosen May 15. If none of the candidates gets 50 per cent of the vote plus one, a second ballot will be held, with the leader announced May 22.
Ouellet held a news conference shortly after Drainville's and made it clear she will battle on.
"The race continues and it is far from over," she said. "We think there will definitely be a second ballot. There are a lot of undecided party members but I think that indicates there will be a second round."
Cloutier is also staying in the race.
Also on HuffPost