"We have been monitoring weather forecasts closely and several reports predict thunderstorms in the area," the Democratic National Convention Committee said Wednesday.
"Therefore we have decided to move Thursday's proceedings to Time Warner Cable Arena to ensure the safety and security of our delegates and convention guests."
The Thursday address was scheduled to take place in the Bank of America stadium, a dramatic finale to the Democrats' national convention rally.
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It will now take place in an arena used for college basketball, with a capacity of about 20,000.
The decision robs Obama of an opportunity to rekindle memories of his rousing stadium addresses four years ago, which helped build his reputation as a master orator and the figurehead of a mass movement for change.
It also prevents him from speaking directly to a swathe of voters in a key swing state that he won by just 14,000 votes in 2008 and where today he trails in the polls to rival Mitt Romney.
Just days ago officials had insisted the event would go ahead as planned, "come rain or shine."
According to the National Weather Service, there is "a chance of showers and thunderstorms before midnight" on Thursday with the likelihood of precipitation placed at about 30 percent.
Republicans reveled in the news and implied the move may have been prompted by a lack of support.
"The Democrats continue to downgrade convention events due to lack of enthusiasm -- this time they are moving out of Bank of America/Panther stadium. Problems filling the seats?" asked Republican spin doctor Kirsten Kukowski.
"Apparently the president is not prepared to speak during a light September rain here in North Carolina. That's unfortunate," said Congressman Patrick McHenry of North Carolina.
"I think it also has more to do with attendance rather than precipitation."
Democrats refuted that charge and said 65,000 tickets had been allocated.
Ahead of the event, tickets available on the Internet were being offered for as much as $230 a piece.
Organizers had earlier handed out tens of thousands of "community credentials" on a first-come-first-served basis.
In August local media reported thousands of people waited in line for hours for a chance to get a ticket only to leave empty-handed.
With days to go before the speech, local Internet sites were littered with locals willing to pay for tickets.
The Democratic convention, which opened Tuesday, has already seen its fair share of wet weather.
On Tuesday, braving bouts of torrential rain, tens of thousands of Obama supporters took over downtown Charlotte Monday as Jeff Bridges and James Taylor kicked off festivities.
With under nine weeks to go to election day national polls show the Republican and Democratic nominees neck-and-neck, but Obama is given a slight edge in a majority of the key swing states.
