The Australia leg-spin legend, Hampshire's captain since 2004, dramatically called time on his eight-year association with the county on Thursday just weeks before the start of the new English season even though he had a contract for one final campaign with the Rose Bowl club.
Warne, 38, said business commitments, as well as a desire to see more of his young children, had prompted his decision.
He will now bow out of all senior cricket following his involvement as captain and coach of the Jaipur franchise in the new Indian Premier League.
"My eight years involved with Hampshire have been a wonderful experience. Memories that will last with me forever and likewise the friendships that have been formed at the club," Warne said.
"Unfortunately I am retiring from all first-class cricket but will participate in the IPL. Due to some exciting business opportunities and wanting to spend more time with my children, I had to make this call.
"I was very lucky to have played with such a wonderful group of guys.
"To all the fans that have turned up to watch Hampshire play, thank you very much for embracing me," Warne named as one of Wisden's five cricketers of the 20th century in 2000, said.
Warne took 276 first-class wickets for Hampshire at an average of 25.59 with best match figures of seven for 99 against Middlesex at the Rose Bowl.
He also scored 2,040 runs with a best of 107 against Kent at Canterbury in 2005.
More than that, however, he sparked Hampshire's on-field fortunes with his bold and inspiring captaincy and so helped the team become one of English cricket's leading counties."
Rod Bransgrove, Hampshire's chairman, said: "The most effective and entertaining bowler of all time, Shane Warne was also a brilliant leader and strategist. Warnie will be sorely missed, never forgotten."
Hampshire announced Thursday that all-rounder Dimitri Mascarenhas would be their new captain even though the England one-day specialist is due to miss the start of the county season because he too will be playing in the IPL, where he will be a team-mate of Warne's in Jaipur.
Credited with singlehandedly reviving interest in leg-spin bowling, Warne finished his Test career at the end of last year's Ashes series in Australia with 708 wickets at an average of just over 25 apiece from 145 matches.
His record, however, has been surpassed by Sri Lanka's extraordinary off-spinner Muttiah Muralitharan.