The two-time president, also the first black to have occupied the top post, said he was "ready to pass the baton" to his rival in 2008 as he painted an optimistic picture of an "already great nation".
"I can say with confidence there has never been a man or a woman — not me, not Bill (Clinton), nobody — more qualified than Hillary Clinton to serve as president of the United States of America," Obama said amid deafening cheers from thousands of delegates and guests packed into a sports arena here.
In his 45-minute fiery speech, the most high-profile in the ongoing Democratic national convention, Obama asked Americans to shun "cynicism and fear" being propagated by the 70-year-old reality TV star.
"And now I'm ready to pass the baton and do my part as a private citizen. So this year, in this election, I'm asking you to join me, to reject cynicism and reject fear and to summon what is best in us; to elect Hillary Clinton as the next president of the United States and show the world we still believe in the promise of this great nation," he said.
Obama, 54, said the November 8 presidential elections were a "fundamental choice" about what the country is and the very "meaning of our democracy", and "not just a choice between parties or policies; the usual debates between left and right."
He endorsed 68-year-old Clinton, who had served as the secretary of state under his presidency, for having a first- hand knowledge of the challenges that come with the job and contrasted it with the lack of experience of the Republican nominee - a non-politician.
"You know, nothing truly prepares you for the demands of the Oval Office. Until you've sat at that desk, you don't know what it's like to manage a global crisis, or send young people to war. But Hillary's been in the room; she's been part of those decisions."
"He (Trump) is not really a plans guy. Not really a facts guy, either. He calls himself a business guy, which is true, but I have to say, I know plenty of businessmen and women who've achieved success without leaving a trail of lawsuits, and unpaid workers, and people feeling like they got cheated," he said.
The third day of the convention also witnessed Vice President Joe Biden making an emotional valedictory speech and Clinton's running mate Virginia Senator Tim Kaine formally nominated as the vice presidential candidate.
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