He has been openly considering a party switch for some time. In April 2011, he said that he was open for running for reelection as a Democrat.
Chafee could face a difficult Democratic primary, with state Treasurer Gina Raimondo and Providence Mayor Angel Taveras mulling campaigns.
The Rhode Island governor ran as an independent in 2010. He previously served as a Republican senator from Rhode Island from 1999 until 2007, when he lost reelection to Sheldon Whitehouse.
He was consistently the most liberal Republican in the Senate, being the only Republican in the Senate to vote against the Iraq War. He endorsed President Barack Obama in 2008 and 2012.
During the White House briefing Wednesday, press secretary Jay Carney said the president "welcomes" Chafee to the party and pointed out the governor has supported Obama's views in the past.
"I’m thrilled to welcome Linc to the party of Jefferson and Jackson, Roosevelt and Kennedy – and I look forward to working with him in the years ahead," said Obama in a statement released Wednesday afternoon.
This post has been updated to include comments from the White House.