Angela Eagle has pulled out of the Labour leadership race and thrown her support behind Owen Smith in his challenge to Jeremy Corbyn.
The ex-shadow business secretary said she was dropping out "in the interests of the party" and would back Mr Smith "with all her might and enthusiasm".
It came as Mr Smith won the backing of more MPs in the process of selecting a single candidate to take on Mr Corbyn.
Mr Corbyn says he will win despite losing the support of most of his MPs.
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Mr Smith's emergence as the sole challenger to Mr Corbyn comes after weeks of turmoil within the party following the UK's vote to leave the EU, which triggered a mass walkout from the shadow cabinet and an overwhelming vote of no confidence in Mr Corbyn by his MPs.
Both Ms Eagle and Mr Smith said whichever of the two them had the least support in the parliamentary party would withdraw from the race to challenge Mr Corbyn for the leadership, to which he was overwhelmingly elected only last September.
Although nominations won't officially close until Wednesday, Mr Smith - a former shadow work and pensions secretary - had built up a commanding lead over his rival, winning the backing of 90 MPs, including former leaders Ed Miliband and Margaret Beckett.
Labour leadership election timetable
- 18 July: Registration to sign up as a registered supporter to vote in the election opened at 17:00 BST
- 19-20 July: The number of MP nominations for each candidate to be published
- 20 July: Deadline for people to sign up as a registered supporter closes at 17:00 BST
- 22 August: Ballot papers start to be sent out in the post (Labour Party members only) and by email
- 21 September: Deadline for ballot papers to be returned closes at midday
- 24 September: The result will be announced at a special conference in Liverpool
Although Ms Eagle's figures have not been released, the BBC's political editor Laura Kuenssberg said she understood she had got 25 fewer.
Offering her congratulations to Mr Smith, Ms Eagle said the Labour Party under Mr Corbyn's leadership "was not working" and that he did not have the confidence of his MPs.
She urged Labour activists to register to vote in the leadership election - the result of which will be announced on 24 September - to ensure the party could be an effective opposition able to "take the fight" to the Conservative government.
'Just as radical'
Asked whether she had done a deal with Mr Smith, she said the two would be "in lockstep" from now on seeking to forge a "strong and united" opposition which "could do its job" under a leader who could "heal" the party.
Mr Smith said he had garnered "significantly more" support than Ms Eagle but praised her courage in coming forward to challenge Mr Corbyn and said he wanted her to be his "right-hand woman" during the leadership campaign and afterwards.
Promising to "move Labour on" from the turmoil of recent months, Mr Smith said he was "just as radical as Jeremy Corbyn" but better placed to help Labour get back into government and "put principles into practice".
Saying he represented a "new generation" of Labour politicians, Mr Smith - a former BBC journalist who was elected to Parliament as MP for Pontypridd in 2010 - said Labour had "been on the sidelines too long" and he was capable of "getting Labour ready to win back the trust of the British people and getting Labour back into power".
The BBC's Laura Kuenssberg said Mr Smith was regarded as "clean skin" having only entered frontline politics relatively recently while Ms Eagle had served in government under Gordon Brown and, crucially, backed the Iraq War in 2003.
Both Ms Eagle and Mr Smith quit the shadow cabinet in the wake of the EU referendum result, which triggered a mass revolt against Mr Corbyn's leadership. Ms Eagle threw her hat into the ring first to challenge Mr Corbyn and was later joined by Mr Smith.
The former shadow welsh secretary will now go up against Mr Corbyn in a head-to-head contest over the next two months.