Clarke, 33, made the announcement at the pre-match press conference on the eve of the final at the MCG tomorrow, bringing an end to an ODI career that began in 2003.
Clarke will, however, continue to play Test cricket.
"Tomorrow will be my last ODI game for Australia. I've just spoken to my team-mates, spoken to James Sutherland and Rod Marsh and Darren Lehmann and informed them that tomorrow will be my last ODI game for Australia," he said.
He led Australia in 73 ODIs, of which Australia won 49. In 108 Tests he played so far, Clarke has scored 8432 runs at an average of 50.79 with 28 hundreds and 27 half centuries.
Even his participation in the World Cup was in doubt but the selectors gave him time to be fit by the second group match against Bangladesh. Eventually, he regained full fitness and led the side admirably well so far though he has not been in the best of form with the bat.
He said it was the right time to leave the ODI stage so that another leader takes over as he will not be in the frame to play another World Cup.
"I think I'll leave the one-day game for Australian team in a better place than when I took over the captaincy. Last World Cup we were knocked out in the quarter-final, this World Cup we have been able to make the final and hopefully tomorrow we can go on and have success in that final. So two finals and one quarter-final for my time in World Cups," he said.
"I'm hopeful it will prolong my Test career as well. That's obviously a priority for me, to continue to be successful in Test format. I think by walking away from ODI cricket it probably gives me my best opportunity.
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