Schwarzer told Football Federation Australia of his decision just hours before new coach Ange Postecoglou confirmed his first Socceroos squad.
The 41-year-old was overlooked for Australia's recent friendlies against France and Canada, given his continued lack of game time for English Premier League side Chelsea.
It appears emerging 25-year-old Mitch Langerak is now the favourite to succeed Schwarzer as Australia's first-choice gloveman.
Schwarzer is Australia's most-capped player with 109 appearances for the Socceroos since his debut in 1993.
His departure is the first major change to the Socceroos team since Holger Osieck's sacking last month, and there will likely be more to come.
It is expected under-fire Socceroos veteran Lucas Neill will be demoted from the captaincy when Postecoglou's 23-man squad for a November 19 friendly against Costa Rica is unveiled at 11:00am AEDT on Wednesday.
The 35-year-old is also under pressure to retain his central defensive post and could be named on the bench in the match at ANZ Stadium.
Fellow veterans such as David Carney and Sasa Ognenovski are also under the spotlight.
But Postecoglou is believed to favour calling the squad together for a week-long training camp in Sydney before deciding on any individual futures.