The move leaves the WBC heavyweight title vacant, and although Klitschko could decide to return to the ring to fight for it again in the future he says that is unlikely.
The 42-year-old, who boasts a 45-2 record with 41 KOs, has been heavily involved in the ongoing political crisis in his home country, where pro-European demonstrators have staged large-scale protests in Kiev against president Viktor Yanukovych's refusal to sign a deal for closer integration towards the European Union.
Klitschko, the leader of the Ukrainian Democratic Alliance for Reform and a member of the Ukrainian parliament, has emerged as a leader of the opposition movement and has confirmed he will make a run for the country's presidency.
In a statement, Klitschko said: "I want to thank the WBC and its president Don Jose Sulaiman for the support in our fight for democracy and freedom in the Ukraine. It was and is a great honor to hold the WBC title and I've always done it with pride. The offer of the WBC gives me the theoretical possibility to return to the boxing ring which I cannot imagine at all to the current state.
"Right now, my full concentration is on politics in Ukraine, and I feel that the people need me there. My brother Wladimir will ensure more sporting success and I will - as always - support him as much as he currently supports me in my political fight."
Klitschko's younger brother Wladimir, 37, is the WBA (Super), IBF, WBO, and IBO world heavyweight champion.
In a statement, WBC executive secretary Mauricio Sulaiman, praised Klitschko's record and his move into politics.
"The WBC is proud and honored to confirm the status of Vitali Klitschko as WBC Heavyweight World Champion Emeritus. Undoubtedly, Vitali has earned that distinction through his actions inside and outside the ring," the statement said.
"Vitali Klitschko is fighting the fight of his life; this time outside the ring. Vitali is showing to the world what is the true heart of a champion by leading his countrymen to battle in the streets in their search of human equality, rights and peace for the great country of the Ukraine."
Klitschko began his professional boxing career in 1996, and won his first heavyweight title in 1999 when he beat British boxer Herbie Hide with a second-round knockout.
He defended it successfully twice before suffering a shock loss to Chris Byrd. Klitschko had been leading the fight until suffering a shoulder injury - later diagnosed as a torn rotator cuff - which forced him to throw in the towel.
He challenged for the title in June 2003, taking on Lennox Lewis in Los Angeles, and although he lost a controversial fight in six rounds, he gained much respect and a year later - after Lewis retired to vacate the title - Klitschko regained it with victory over Corrie Sanders.
After defending the crown in a fight against Danny Williams, Klitschko announced his retirement in November 2005 after a serious knee injury - again awarded the Champion Emeritus status - but he launched a comeback in January 2007 and won the heavyweight title for a third time the following August.