Mr Cunliffe withdrew and threw his support behind Mr Little, ensuring the union vote would not be divided.
Although unions only have 20% of the vote in the leadership contest, as a former Engineering, Printing and Manufacturing Union secretary and a former party president, Mr Little should receive wide support both in the union movement and the wider membership.
The caucus and the party membership each have 40% of the vote for leader.
Mr Little only had his position in Parliament confirmed after special votes were counted and will need to demonstrate to members during the national round of leadership meetings he can not only unite the party but lift the all-important party vote.
Before entering Parliament, Mr Little was considered a potential party leader.
He said Mr Cunliffe had done the right thing by withdrawing.
''I think it's the right thing for the party, and for himself, actually,'' he said.
It had become clear Mr Cunliffe was unlikely to be able to make the changes the party needed and to lift its support among the wider population, he said.
Mr Cunliffe's support should also help give Mr Little support in the important constituencies in West and South Auckland.
Asked about Mr Cunliffe's endorsement of him, Mr Little said he appreciated any support but it would still be a challenge to secure the leadership.
He repeated he was not offering positions to MPs before the leadership vote was held and had not offered Mr Cunliffe anything.
''I appreciate any support I can get. It's always welcome but I've still got my work cut out for me to convince those who are wondering if I've got enough experience in Parliament, and other qualities you need for the leadership.''
List MP David Parker announced on Sunday his decision to contest the leadership and Mr Cunliffe told Mr Little on Sunday night of his decision to quit the race, raising questions of revenge by Mr Cunliffe.
After the election, Mr Parker, the former deputy to Mr Cunliffe, called on him to resign, say his position was untenable.
Mr Cunliffe told Mr Parker of his decision yesterday morning.
''He's made the right decision for him and the party, and he should be treated with the respect all former leaders deserve,'' Mr Parker said.
Asked about Mr Cunliffe's endorsement of Mr Little, Mr Parker said MPs could endorse whoever they liked.
He did not believe it was a punishment for his statement he had lost confidence in Mr Cunliffe following the election.
''But I can't answer for him, and I won't.''
He said it was Mr Cunliffe's right to decide to stay on in Parliament.
The third contender, Grant Robertson, is popular in caucus and is likely to have Auckland list MP Jacinda Ardern as his running mate.
The other two contenders need either a woman, a Maori or Pacific Island MP as a running mate given the strength of the Maori and Pacific Island vote for Labour and the ''man ban'', which requires 45% of Labour candidates to be women.
Leadership meetings start in Wellington on October 22.
The Dunedin meeting will be held on October 30, Invercargill's on October 31.
Dunedin South MP Clare Curran and Dunedin North MP David Clark both supported Mr Robertson in the last contest.
