The Chelsea goalkeeper told Football Federation Australia of his decision just hours before new coach Ange Postecoglou confirmed his first Socceroos squad.
The 41-year-old was overlooked for Australia's recent friendlies against France and Canada, given his continued lack of game time for Chelsea, where he is the back-up to Petr Cech.
It appears emerging 25-year-old Mitch Langerak is now the favourite to succeed Schwarzer as Australia's first-choice in goal.
Schwarzer is Australia's most-capped player with 109 appearances for the Socceroos since his debut in 1993.
His departure is the first major change to the Socceroos team since Holger Osieck's sacking last month, and there will likely be more to come.
Several other high-profile names are missing from Postecoglou's squad for the November 19 friendly against Costa Rica, which is 22 strong following Schwarzer's decision not to accept a call-up.
Luke Wilshere, David Carney and Sasa Ognenovski are out, along with the likes of Jackson Irvine, Nikita Rukavytsya and Brett Holman.
Lucas Neill, 35, is included, but expected to be demoted from the captaincy for the match.
Postecoglou said he intends to offer the players who helped the Socceroos book a ticket to the World Cup next year a chance to prove they still deserve a place in the national team set-up.
"The first task is to have a good look at the bulk of the players who played a significant part in qualifying Australia for the 2014 World Cup and also giving opportunities to players I think have the ability to improve the team," he said.
"I want to give every Australian player the best opportunity to stake a claim for Brazil and beyond."
Goalkeepers: Mitchell Langerak (Borussia Dortmund), Mat Ryan (Club Brugge KV)
Defenders: Jason Davidson (SC Heracles Almelo), Ryan McGowan (Shandong Luneng), Lucas Neill (Omiya Ardija), Rhys Williams (Middlesbrough FC), Alex Wilkinson (Jeonbuk Hyundai), Michael Zullo (Adelaide United)
Midfielders: Oliver Bozanic (FC Luzern), Mark Bresciano (Al Gharafa), Ivan Franjic (Brisbane Roar), James Holland (FK Austria Vienna), Mile Jedinak (Crystal Palace FC), Matthew McKay (Brisbane Roar), Mark Milligan (Melbourne Victory), Tom Rogic (Celtic FC), Dario Vidosic (FC Sion)
Forwards: Tim Cahill (New York Red Bulls), Josh Kennedy (Nagoya Grampus), Robbie Kruse (TSV Bayer 04 Leverkusen), Mathew Leckie (FSV Frankfurt), Tommy Oar (FC Utrecht)