The 41-year-old Austrian made his grand prix debut in 1997 for Benetton, but was also a highly-regarded McLaren test driver.
Wurz, also a two-time Le Mans winner, completed his F1 career at Williams in 2007 but most recently has raced for Toyota in the world endurance championship.
He is currently the president of F1’s safety-oriented Grand Prix Drivers’ Association.
“I’ve enjoyed half of my lifetime competing at the top of motor sport and another quarter of it working my way up there, so I feel the time is right to call it a day and bring my career as a professional racing driver to a close,” he said on Tuesday.
Wurz said his decision to quit racing was prompted by last year’s Le Mans, where a 15-hour race lead ultimately ended in retirement.
“I’d put so much effort into 2014 and into the race preparation that I found it very difficult to move on,” he explained. “This was the moment I knew that my time at the sharp end was coming to a natural end.”
Wurz’s final race will be the 6 hour sports car race in Bahrain later this month.
“My future will still evolve around racing, it’s in my blood after all,” he added. “You will still see me around, just without the overalls.”