The UDU was backing bin Ali because it felt the incumbent, who is running for a fourth, five-year term on 24 October, will continue "to drive the democratic process and realise the objectives of economic and social development," said UDU secretary-general Ahmad Inubli.
The UDU will field candidates in the legislative vote that will be held on the same day as the presidential polls.
Inubli was recently elected head of the UDU after his predecessor, Abd Al-Rahman Tlili, was sentenced to nine months in jail for abuse of power while in public office.
Bin Ali announced on 3 September that he would stand again in the October elections.
He is able to do so after a constitutional amendment approved by 99% of the voters in a referendum in May last year abolished a three-term limit on presidential mandates.
Bin Ali, 68, has ruled Tunisia since 1987 when he deposed the country's first president al-Habib Burguiba, and will be seeking a fourth five-year term.
So far, three other presidential candidates have been announced: Muhammad Ali Halwani of the Al-Tajdid party, Munir al-Biji of the Liberal Social Party, and Muhammad Bushiha of the People's Unity Party.
The UDU is the second opposition party, after the Socialist Democrat Movement, to back bin Ali in the election.
Rights groups have regularly criticised Tunisia for its poor human rights record and accuse the government of using harassment and intimidation to silence critics.
Since he came to power in 1987, bin Ali has presided over an authoritarian regime overlaid by an elaborate facade of democratic reform.