Richardson's announcement came as Obama grappled with a row over incendiary racial remarks by his former pastor that polls showed cost him support in his race against Hillary Clinton for the Democratic nomination.
The move is a double victory for the Illinois senator, bringing on board a supporter with influence in the important Hispanic community and well-known ties to the Clinton family.
Richardson served as energy secretary and UN ambassador in the administration of President Bill Clinton and was called on to conduct delicate diplomatic missions in North Korea and Saddam Hussein's Iraq.
In an e-mail to supporters, Richardson reiterated his affection for the Clintons but said it was time for the Democrats to end their infighting and allow "a new generation of leadership to lead America forward."
"Barack Obama will be a historic and a great president, who can bring us the change we so desperately need by bringing us together as a nation here at home and with our allies abroad," Richardson wrote.
He referred to Obama's landmark address on race and politics Tuesday, in which he tried to blunt the controversy over his former pastor Jeremiah Wright, saying his words were of a "courageous, thoughtful and inspiring leader."
Richardson dropped out of the race for the Democratic nomination on January 10 after a poor showing in the first state-based primary and caucus contests.
For weeks, Obama and Clinton, his Senate colleague from New York, have been locked in a bitter and tight battle for the right to face Republican John McCain in the November 4 presidential election.
Estimates show Obama leading the former first lady in nominating delegates 1,628 to 1,493 but he faces a major test in the April 22 primary in delegate-rich Pennsylvania, where Clinton has a large lead in opinion polls.
Both contenders are still a long way from the 2,025 delegates needed to secure the nomination and their battle could go to the floor of the party convention this August in Denver, Colorado.
Richardson's comments came in the wake of a bizarre wrinkle in the campaign, when the State Department announced that two of its contractors were fired and a third disciplined for accessing Obama's passport files without authorization.
The State Department characterized it as an "imprudent curiosity" and vowed to investigate, while the Obama campaign accused Republican President George W. Bush's administration of an "outrageous" breach of privacy for political ends.
"These unauthorized accesses were detected by the State Department and they were immediately acted upon," department spokesman Sean McCormack told reporters Thursday, adding the breaches occurred between January and March.
"In each of these cases, the unauthorized access was caught by a monitoring system that was tripped when, in each of these cases, an employee accessed the record of a high-profile individual."
Obama spokesman Bill Burton condemned it as an "outrageous breach of security and privacy, even from an administration that has shown little regard for either over the last eight years."
"Our government's duty is to protect the private information of the American people, not use it for political purposes."
State Department officials were to meet with staff from Obama's campaign on Friday to discuss the matter.
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