The 35-year-old affable pacer, who retired from Test cricket in 2010, had been most recently laid low by a calf injury.
Lee, a part-time bass guitarist who enjoys a huge fan-base in India, said he could not carry on anymore given the suffering his body has endured.
"It has been a dream career, I guess, 13 years at the top. I couldn't ask for much more," Lee told 'Channel Nine'.
Lee said he had initially planned to retire after the upcoming World Twenty20 tournament in Sri Lanka.
Image: Brett Lee poses for photos at the Sydney Cricket Ground in Sydney, Friday, July 13, 2012. Lee, the veteran Australian pace bowler has announced his retirement from all international cricket but will continue to play Twenty20 matches in the Indian Premier League and in Australia's domestic Big Bash competition.