Harris made the shock announcement after scans revealed new damage to his already injured right knee which was going to rule hime out of the Ashes Series.
"Given the news I received yesterday, and after talking it over with my family, I know now is the right time to step away from cricket," Harris said.
"I'm pretty lucky, I have had a wonderful career and nothing made me prouder than pulling on the baggy green.
"I played 27 more Tests than I ever thought I would and I have relished every single moment of them. I couldn't have played with a better bunch of blokes and walking away from the team and our support staff is probably the hardest thing to stomach right now.
"This is a very special team and I know they will do Australia proud in this Ashes series. I know I will certainly be watching every ball.
"I am lucky enough to have a wonderful family who have supported me through the ups and downs of my career and I'm looking forward to the next chapter of my life with them and spending time with my new son Carter.
"Whatever is next for me, and I don't know what that is right now, I know it will still involve cricket as that is what I love and I want to be able to give back to the game that has given me so much."
Pat Cummins has been drafted into the squad.
BREAKING: Ryan Harris has announced his retirement from all cricket effective immediately #Ashes
— cricket.com.au (@CricketAus) July 4, 2015