Bafana Bafana head coach Gordon Igesund revealed the news when announcing his squad for the upcoming friendlies against Poland and Kenya.
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Igesung conceded that, while he was sad to lose a player of such quality, he believes that the 30-year-old has handled the situation well.
Speaking to reporters, the coach explained: "I am disappointed that Steven has retired from the national team but the way he has retired is the right way. I think it was a tough decision for him.
"His presence and leadership is invaluable and could have helped us in our mission for 2013 Africa Cup of Nations and the World Cup qualification but we must respect his decision."
Tottenham defender Bongani Khumalo, who is currently on loan at PAOK, has been confirmed as South Africa’s new captain.