"I have invited you here to finally put an end to the speculation and officially announce my retirement from first-class cricket in Australia," Gillespie told a news conference in Adelaide.
"Cricket has been very good to me. I have travelled the world, I have met some fantastic people, and I have spent my time doing the thing I love the most - playing cricket.
"But it has always been important to me to end my career on my own terms, while I am still contributing. I do not want to get tapped on the shoulder and shown the door.
"And the time has come. I have a young family to consider. My daughter has reached her teens, I have travelled for all of her life, I think it is time I was around for her, and her brothers and my wife."
Gillespie is Australia's sixth-highest test wicket taker with 259 victims at an average of 26.13 in 71 matches.
He formed a formidable new-ball partnership with Glenn McGrath from 2002-05 and was capable of bowling long spells with consistent line and length.
