Once holder of the 50m and 100m freestyle world records, West Australian Sullivan - who won two Olympic silver medals in Beijing - had been plagued by shoulder issues in recent times.
The 28-year-old had been hoping surgery - which caused him to withdraw from the Glasgow Commonwealth Games team - would extend his swimming career until the 2016 Olympics.
Sullivan competed at three Olympics, and looked on track to make it three Commonwealth Games appearances when he booked his berth at Glasgow by winning the 50m freestyle at April's Australian Championships in Brisbane - where he beat a field featuring James Magnussen.
His winning time in the final was the third-fastest recorded in 2014.cent years and finishes his career without an individual title at any of the major international meets.
"Eamon made his debut onto the Australian swim team as an 18-year-old in Athens and then 10 years later was able to take out the men's 50m freestyle at this year's Australian championships which was a remarkable achievement," Swimming Australia CEO Mark Anderson said in a statement.
"As an athlete he's been the world's best, which is what we are all striving for as part of the goal to be the best in the world in and out of the pool by 2020."
Having pulled out of the Glasgow Games when he underwent a third bout of shoulder surgery last month, Sullivan decided his body was no longer up to the demands.
"One of the things I'm most proud of throughout my career is overcoming injuries," Sullivan said in a statement.
"I'm at a point where I've had one too many injuries, and it has become too much to manage.
"In the end my body has let me down, so I'm very disappointed, but it's the right time."
Sullivan will also be remembered for being part of the infamous Stilnox Six, a group of Australian swimmers reprimanded for taking part in a bonding session involving the sleeping pill in the lead up to the troubled London Olympics pool campaign.
Eamon Sullivan's career highlights
-330 days as 100m freestyle world record holder (Beijing, 2008)
-430 days as 50m freestyle world record holder (Olympic trials Sydney, 2008)
-5 world records
-Made 12 Australian swimming teams
-3 Olympic medals (2 silvers and bronze, Beijing 2008)
-3 world championships medals (two gold 2007 and 2011, bronze 2007)
-5 Commonwealth Games medals (three gold, silver, bronze)
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