"I am so pleased that the Labour Party has demonstrated that it values me for who I am - someone who will champion working people and the labour movement, and someone who will be independent-minded and ambitious for the future of this city."
The party sees a Collins mayoralty as historic, and would represent the first Pacific mayor of the city.
Earlier this month, the current mayor Phil Goff said he would not be seeking re-election this year.
"It's more than 40 years since I was first elected to office as MP for Roskill in 1981 and I believe it's time to pass the baton to a new generation of leadership," Goff said.
Auckland businessman and fellow mayoral candidate Leo Molloy welcomed Labour's endorsement.
"Mr Collins is a career politician who only represents more of the same failed policies Auckland has suffered for decades.
Molloy said he is the only candidate "running as a true independent".
"I am also the only candidate with real-world experience who is ready to stand up to Wellington and relentlessly pursue a more prosperous Auckland for all," he said.
Collins confirmed in January he was planning on running for mayor. At the time he said he would run with or without Labour's endorsement.
Initially, two Labour-aligned councillors, Collins and Richard Hills, explored potential bids to succeed the retiring Goff.
Collins has been a councillor, representing Manukau, since 2016.
"This endorsement follows a thorough process, and I've been gratified to see the involvement of members, and to receive their support.
"I want to be a Mayor for the people, and I'm proud to have the solidarity of the Labour Party and labour movement on this journey," Collins said.
