"It wasn't to be and I have to accept it," the 31-year-old said in a statement on his verified Twitter account (@BSchweinsteiger).
"The historic and emotional high was winning the World Cup in 2014," the Manchester United player added.
Schweinsteiger was vice-captain of the national team when Germany edged Argentina in extra-time to claim a fourth World Cup title and took over as captain when his then Bayern Munich team mate Philipp Lahm stood down after the 2014 tournament.
His seventh major tournament saw him lead Germany to the last four of the European Championships earlier this month but the 2-0 defeat to hosts France proved to be his 120th and last appearance.
His first call-up came as a 19-year-old in June 2004 and a year later, he scored the first of 24 international goals.
"I was able to turn out 120 times for my country and experience moments which were indescribably beautiful and successful," he tweeted.
"It is only right and sensible to finish now and wish the team all the best in qualifying for the 2018 World Cup."
After playing for two junior clubs the player known universally as "Schweini" joined Bayern in 1998 as a teenager.
He played 500 matches for the most successful club in Germany, winning eight Bundesliga titles and the 2013 Champions League before joining Manchester United two years later.
His first season at Old Trafford was beset by poor form and regular injuries, and retiring from international duty may have been one way of attempting to persuade new United manager Jose Mourinho of his determination to seal a regular place.
The announcement came on the day that British media reported Schweinsteiger would be sold if Mourinho succeeded in signing French midfielder Paul Pogba from Juventus.
(Reporting by Steve Tongue; Editing by John O'Brien)
