"I honestly wanted to play a couple more years, whether it was over in the UK or here," the 34-year-old Tait told cricket.com.au.
"The elbow has pretty much gone off a cliff now, it's done and dusted. "I suppose when you're not contributing on the field as much as you'd like to, it's time to finish up."
Tait was instrumental in Australia's 2007 World Cup triumph in West Indies, where he was the joint-second highest wicket-taker with 23 dismissals in the tournament.
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"In his prime, Shaun was the world's fastest bowler. It was incredibly exciting to watch him full flight bursting through the defences of the game's best batsmen," Cricket Australia CEO James Sutherland said in a statement.
Tait represented Australia in three tests, 35 ODIs and 21 T20s and made his last international appearance against India in the shortest format at Sydney last year.
(Reporting by Hardik Vyas in Bengaluru)
