The Mumbai batter made his India debut in a Twenty20 International in 2011 but established himself in Test cricket as a resolute middle-order player, building his game on defence and patience.
"The reality of life is that everything has a beginning and everything has an end," the 38-year-old said in a video on social media.
"When that time comes, you simply have to respect it and move forward. I've always relied on timing in my batting, and I've always understood its importance.
"Today, I feel the timing is right for me to move on and announce my retirement from international cricket and all formats."
Rahane played the last of his 85 Tests in July 2023, before falling out of the side. He had not played white-ball cricket for India since 2018.
He scored 5,077 Test runs at an average of 38.46, including 12 hundreds.
As stand-in captain for Virat Kohli, Rahane led India to a memorable 2-1 series victory in Australia in 2020-21.
With Kohli on paternity leave and India reeling after being bowled out for 36 in the Adelaide opener, Rahane's masterful hundred in Melbourne helped level the series and set the tone for a remarkable comeback.
Rahane also led India in Tests against Australia, Afghanistan and New Zealand. India won four and drew two of the six Tests under him, leaving him unbeaten as captain.
"I lived by one simple rule: always put my country and my team ahead of myself," a visibly emotional Rahane said in the video.
"I played this game with complete honesty, and I always believe that if your intent is right, the game will always take care of you."
Currently doing commentary for The Hundred in England, Rahane remains active in domestic franchise cricket.