Rice said the US is "fortunate" to have Kerry as its next Secretary of State, once he is confirmed by the Senate.
"For over four decades, Senator Kerry has served extremely ably and demonstrated selfless commitment to our country... Senator Kerry has led tirelessly and effectively to advance US interests and values around the globe," Rice said in a statement.
Obama nominated Kerry, the 69-year-old Senator from Massachusetts, as Hillary Clinton's successor to lead the State Department.
Rice was the front-runner for the post but withdrew her name from consideration last week following severe Republican criticism over her statements on the attack on American consular staff in Benghazi.
Days after the American embassy in Benghazi was targeted, Rice had appeared on several TV news shows and said the September 11 attack that killed US Ambassador Chris Stevens and three other American consular staff was a spontaneous assault on US premises in the wake of the protests over an anti-Muslim film.
The US had later termed it as a terrorist attack. Obama had fiercely defended Rice and said the criticism against her was "outrageous."
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He said Republican senators, notably John McCain and Lindsey Graham, "should go after me," if they had to blame anyone for the Benghazi attack.
"When they go after the UN ambassador, apparently because they think she's an easy target, then they've got a problem with me," he had said last month.
In withdrawing from the Secretary of State race, Rice had written to Obama saying "the confirmation process would be lengthy, disruptive, and costly -- to you and to our most pressing national and international priorities. That trade-off is simply not worth it to our country."
Rice cited Kerry's "heroic" service in the US Navy, opposition to the Vietnam War, his tenure in the US Senate and "wise chairmanship" of the Senate Foreign Relations Committee" as attributes that make him the right fit for the job and said she looks forward to working closely with him again on Obama's national security team.
She also expressed gratitude to Clinton for her "exemplary service" as Secretary of State.
"Our nation owes Secretary Clinton an enduring debt of gratitude for her many years of outstanding public service. I look forward to witnessing the next chapter in her remarkable story," Rice said.