Hagel told The Associated Press on Monday that Sestak has demonstrated during his two terms in Congress that he puts the interests of the nation and his constituents ahead of his party.
"I think he's exactly what our country needs more of. I think he's what the Senate needs more of - courageous, independent thinking," Hagel said. "That's what the job is about. You are supposed to use your judgment."
Hagel refused to comment on the candidacy of Sestak's opponent, Republican Pat Toomey, a former congressman.
The men are seeking the seat long held by Sen. Arlen Specter, a Republican-turned-Democrat whom Sestak beat in the primary.
Hagel plans to announce his endorsement Tuesday at news conferences with Sestak in Pittsburgh and Philadelphia.
The two have military ties: Hagel, a moderate Republican, is a Vietnam war veteran, while Sestak is a 31-year Navy veteran who reached the rank of vice admiral before retiring in January 2006.
Like Hagel, Sestak is not afraid to buck his party. Until he won the May primary, Sestak received the cold shoulder from Democratic leaders including President Barack Obama and Gov. Ed Rendell, who backed Specter's bid for a sixth Senate term.
Hagel is co-chairman of President Obama's Intelligence Advisory Board. While in the Navy, Sestak served in the Clinton White House as director for defense policy on the National Security Council.
Hagel is the second prominent figure outside the Democratic Party to endorse Sestak, who is trying to woo independent voters. Last week, he was endorsed by New York Mayor Michael Bloomberg, a three-term mayor who left the Republican Party to become an independent.
Meanwhile Monday, Toomey kicked off a four-day campaign bus tour.
He spoke and answered questions from political insiders at a Pennsylvania Press Club luncheon in Harrisburg on Monday, and his bus planned stops at locations throughout northeastern and central parts of the state.
In his speech, Toomey blamed liberal Democratic policies that Sestak supports for impeding the nation's economic recovery and keeping unemployment high. He said he would reduce corporate taxes, federal spending and the role of government.
"Joe thinks that we should have a dramatically larger federal government, should spend much more money, we should launch new programs, new bailouts," he told reporters. "And I just disagree. I think the government is spending too much money, the deficits are too large. This is a fundamental question that's going to be debated throughout this fall."
Toomey's bus tour is expected to cover most of the state except the southeastern corner, which includes heavily Democratic Philadelphia and its suburbs.