The 35-year-old informed his Australian teammates prior to play on day four of the Second Test against New Zealand at the MCG on Sunday morning.
The Victorian had been added to Australiaās 13-man squad for the Second Test after a hamstring injury to Josh Hazlewood but missed the final XI with James Pattinson preferred.
Siddle will retire after taking 221 wickets in 67 Test matches for his country. He also represented Australia in 20 One-Day Internationals.
The lion-hearted quick last played for Australia during the 2019 Ashes when the tourists retained the urn.
āItās always hard to know when the right time is,ā Siddle told Fox Cricket.
āThe Ashes was the main goal, to try and get on that touring party and be a part of that series.ā
āOnce Iād ticked that off, I was talking to āPaineyā (captain Tim Paine) and JL (Justin Langer) I thought I could have done it there, but the chance of getting one last crack if it came in Australia, to have one more Test at home would have been nice.
āTo think as a young kid I wouldnāt get a chance to play, Iām obviously very happy and a bit sad.ā
Siddle will continue to play in the Big Bash League with Adelaide Strikers as well as domestically with Victoria and Essex.
Australia are in control of the Second Test against New Zealand, which would seal a series victory ahead of the Third Test in Sydney.