"After a great deal of consideration I have decided to call it a day on my international and first-class career," Swann, 34, said in a statement.
"This decision has been very difficult seeing as the England team has been my family for seven years now, but I feel that now is the right time to step down."
Off-spinner Swann, a popular character in the England team, has been under pressure to keep his place in the squad after taking seven wickets at an average of 80.00 in the three Ashes Tests in Australia.
Swann's shock decision comes a week after England lost the Ashes to Australia following a heavy defeat in the Perth Test to give the home side an unassailable 3-0 series lead with two Tests to play.
His abrupt retirement call means he will be unavailable for the fourth Test, starting in Melbourne on Thursday, and further unsettles the England team following the departure of batsman Jonathan Trott with a stress-related illness earlier in the tour.
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