The case had been cited by Republicans as evidence of widespread ballot tampering and GOP donors had even given $136,000 to the whistleblower.
But after US Postal Service investigators spoke to Richard Hopkins he admitted his claims were false, according to members of the House Oversight congressional committee cited by the Washington Post.
Mr Hopkins had alleged that a postmaster in Erie, Pennsylvania, had told workers to backdate ballots sent after election day.
The case was highlighted by Senator Lindsey Graham in a letter to the Justice Department calling for an investigation.
Mr Hopkins, 32, recanted his claims and signed an affidavit for the US Postal Services Office of Inspector General, according to the Washington Post.
Democrats on the committee took to Twitter and wrote “whistleblower completely RECANTED.”
The incident occurred as Donald Trump refuses to concede the election despite the victory of Joe Biden, and Republican politicians continue to falsely claim the result remains undecided.
Mr Trump has continued to claim voter fraud without so far providing any evidence to back up the allegations.
Erie postmaster, Rob Weisenbach, had called the claims “100 per cent” false in a Facebook post and added that they were made by “an employee that was recently disciplined multiple times.”
“The Erie Post Office did not back date any ballots,” wrote Mr Weisenbach.
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