"So it's my turn to call time on my rugby career!" the France-based 33-year-old wrote on Twitter.
"I've been very lucky to have had the experiences I've had in our great game."
One of Australia's most prolific scorers with 34 international tries, Mitchell will play out the rest of the season with French side Toulon.
The announcement comes as a surprise in Australia, given Mitchell told local media in February of his hopes to return home to play Super Rugby.
Making his Wallabies debut as a 21-year-old against South Africa in 2005, Mitchell's career was blighted by injuries but he managed to play in three World Cups and started on the wing in the 2015 final defeat to the All Blacks.
He scored 14 tries across the 2007, 2011 and 2015 World Cups, making him Australia's most prolific try-scorer at the global tournament and second only to New Zealand's Jonah Lomu and South Africa's Bryan Habana, who each scored 15.
Following the 2015 World Cup final, Mitchell played only one more test, coming off the bench in a Rugby Championship match against South Africa in Brisbane in September before his season was cut short by injury.
Mitchell also enjoyed a stellar career in Super Rugby, playing over 100 games for the Queensland Reds, Western Force and New South Wales Waratahs before heading to France in 2013.
(Reporting by Ian Ransom; Editing by Sudipto Ganguly)
