Vettel, who won all of his championship titles with Red Bull between 2010 and 2013, is among the sport’s most successful drivers, having recorded 53 race wins and 122 podiums during his 15-year career.
Only Lewis Hamilton and Michael Schumacher have won more than the 35-year-old German, currently in his second year racing for Aston Martin after a six-year stint with Ferrari.
“The decision to retire was difficult for me and I spent a lot of time thinking about it,” Vettel said.
“At the end of the year, I want to take a little more time to think about what I’m going to focus on next. It’s very clear to me that as a father, I want to spend more time with my family.
“But today is not about saying goodbye. It’s more about saying thank you – to everyone – and especially to the fans, without whose passionate support Formula 1 could not exist.”
After winning four consecutive titles with Red Bull, Vettel moved to Ferrari ahead of the 2015 season.
However, a fifth championship continued to elude him as he twice finished second to Hamilton in the drivers standings.
With Aston Martin, he only made the podium once, finishing second at the 2021 Azerbaijan Grand Prix.
“I have had the privilege of working with many fantastic people in Formula 1 over the past 15 years, there are far too many to mention and thank them,” Vettel said.
“For the past two years I have been an Aston Martin driver, and although our results have not been as good as we had hoped, it is very clear to me that everything is being put in place. in place for any team to need to race at the highest level for years to come.”
Lawrence Stroll, Executive Chairman of Aston Martin, added: “I want to thank Sebastian from the bottom of my heart for the great job he has done for Aston Martin…over the last year and a half.
“We made it clear to him that we wanted him to continue with us next year, but in the end he did what he thought was right for him and his family, and of course we respect that.”
His final race at the Abu Dhabi Grand Prix in November is expected to be the 300th of his career – a record only six other drivers have achieved.