"I can declare publicly that I will vote for Labour, and I encourage everybody to do the same," Caudwell said in a statement.
"We need a very strong Labour government that can take extremely bold decisions and you can rest assured that I will be doing my best to influence them wherever I can, in putting the great back in Britain."
Opinion polls consistently put Labour on course for a victory that would end 14 years of Conservative government.
A poll published by Ipsos on Tuesday estimated Labour could win 453 seats to the Conservatives' 115, giving them a huge parliamentary majority of 256.
Caudwell made nearly 1.5 billion pounds ($A2.9 billion) in 2006 when he sold his mobile phone retailer Phones 4u.
He said he had been despairing about the Conservatives' performance in government for "many years".
Previously, in an interview with Reuters, Caudwell had expressed frustration at the Conservatives but described Labour as untested.
On Tuesday he cited current Prime Minister Rishi Sunak's handling of the economy during the COVID-19 pandemic - when he was finance minister - and what he said was a lowering of ethical standards under former leader Boris Johnson.
He described Liz Truss's brief spell in charge, which spooked financial markets, as a "debacle".
Caudwell said he liked the focus on accelerating economic growth in Labour's manifesto: "As I have always said, the government must be much more commercially minded to grow GDP in order to finance the public services that benefit all of society without increasing taxes."
The Tories have turned their backs on small business owners like those I met today in Basingstoke. — Keir Starmer (@Keir_Starmer) On Thursday 4 July, you have a chance to vote for change with Labour, to breathe life back into our high streets and make Britain better off. pic.twitter.com/3UuT5PiAr7June 18, 2024
Labour leader Starmer welcomed the endorsement.
"I'm delighted that John, someone with such a successful track-record in business, has today thrown his support behind the changed Labour Party that I lead," he said.
"The message is clear: business backs change and economic stability with Labour, and rejects five more years of chaos and decline with the Tories."
