The 41-year-old Chelsea shot-stopper has made way for a younger man to take over between the sticks for the national team ahead of the 2014 FIFA World Cup
Schwarzer told Football Federation Australia of his decision just hours before new coach Ange Postecoglou names his first Socceroos squad, according to Fox Sports.
After being between the posts for the 6-0 defeat away to Brazil in September, he was overlooked by then-Socceroos boss Holger Osieck for the rout by the same scoreline against France.
Schwarzer is Australia's most capped player with 109 appearances for the Socceroos since his debut in 1993.
His departure is the first major change to the Socceroos team since Osieck's sacking last month, and there will likely be more changes to come.
It's expected under-fire Socceroos veteran Lucas Neill will be demoted from the captaincy when Postecoglou's 23-man squad for a November 19 friendly against Costa Rica is unveiled on Wednesday.
The 35-year-old is also under pressure to retain his central defensive post and could be named on the bench in the match at ANZ Stadium.
Several of his fellow veterans, in particular the recently recalled David Carney, are also under scrutiny.
But Postecoglou is believed to favour calling the established squad together for a week-long training camp in Sydney before deciding on any individual futures.