McCain will then return to Washington in order to continue work on the bail-out plan, his campaign added.
Both candidates had attended meetings in Washington on Thursday along with other members of US congress and George Bush, the US president, however an agreement on the package has not yet been reached.
Follow our coverage of the debate live on Al Jazeera's Twitter service
McCain's call to halt the debate - the first of three between the two candidates before polling is held on November 4 - had been criticised by Obama as "injecting presidential politics into delicate negotiations".
Harry Reid, the senate majority leader, also said that McCain had only "hurt the process".
However, McCain's campaign said the decision to temporarily suspend his campaign had been made "in the hopes that politics could be set aside to address our economic crisis" and condemned the Democrats for playing the "blame game".
Al Jazeera's Rob Reynolds in Oxford, Mississippi, says that it is important for McCain to do well, especially because he is the underdog at present, with the latest poll by ABC News/Washington Post giving Obama, senator for Illinois, a nine-point lead at 52 per cent to McCain's 43 per cent.
In addition to the three presidential clashes the candidates vice-presidential running mates - Democrat Joe Biden and Republican Sarah Palin, will also hold a debate.
Thousands of journalists have descended on the college town of Oxford for the debate, which reports say could be watched on national television by as many as 100 million Americans.
The debate is supposed to be on the candidates' foreign policy, however Jim Lehrer from PBS news, who will moderate the debate, has indicated he will not feel bound to stick solely to foreign policy topics because of the US financial turmoil.
Marwan Bishara, Al Jazeera's senior political analyst, says that the Middle East will dominate any foreign policy discussion.
"When we talk about national security and foreign policy for the United States, think of Iraq, Iran and Afghanistan and the Arab-Israeli conflict. Without addressing those four themes, it's going to be hard to see any debate going on, especially with American soldiers in Iraq and Afghanistan," he says.
"The Russian issue is going to creep into the debate, because of what we saw in Georgia, but the question of the geo-strategy in the Middle East remains central."
'Relief' over debate
Meanwhile Richard Wolfe, White House correspondent with Newsweek
, said the US people would pay attention not to the words, but to the demeanour of the candidates.
The expectation is that McCain will come out and be aggressive or feisty while Obama tends to be more long-winded and professorial, he said.
Those gathered at the University of Oxford, Mississippi, the venue for the debate, said they were relieved it was to go ahead.
"McCain needed to come back here and take part in the debate, if he hadn't it would have been a complete failure," Ian Johnson, an Obama supporter attending a "Rock the Vote" concert in the town, told Al Jazeera.
And Reid Baker, a McCain supporting student at the university, said he was excited and relieved that the event was to take place.
"I understand why he [McCain] did have to go Washington and even if he hadn't come down here I still would have voted for him."