Bevan, 36, said he hoped to remain in the sport, but was retiring as a player because of niggling injuries that had sidelined him for most of the past two seasons.
"It got to the stage where injuries and pain were holding back my motivation," Bevan told reporters.
"I was finding it hard to get up for matches and that was probably a pretty clear indication that it was time to move on.
"But I've pretty much achieved what I wanted to achieve and I've been glad I've had the opportunity to play cricket for a living."
Bevan played 18 Tests for Australia, scoring 785 runs at an average of 29.07, but enjoyed much greater success in the one-day game.
He played 232 limited-overs internationals, scoring 6,912 runs, including six centuries, at an average of 53.58.
He was part of the Australian sides that won the 1999 and 2003 World Cups and won many games for his country, with his calm approach to seemingly impossible run-chases.
Bevan's most famous innings was against the West Indies in Sydney on New Year's Day, 1996, when he hit the last ball of the match to the boundary to seal Australia's win after they had slumped to 74-7, chasing 173 to win.
Bevan, who was also a handy left-arm spinner, made his first-class debut for South Australia in 1989-90 and also played for New South Wales, Tasmania and in England Kent, Leicestershire, Sussex and Yorkshire.
"Michael Bevan was an integral part of Australia's one-day plans for a decade," Cricket Australia chief executive James Sutherland said.
"He has been part of an incredibly successful generation of Australian cricketing talent," added Sutherland.