The 33-year-old, South Africa-born player decided to call it a day after he was left out of England's upcoming tour of the West Indies and the subsequent World Twenty20 Championships in Bangladesh. England and Wales Cricket Board (ECB) said he would not be part of a rebuilding process after the Ashes whitewash.
Kevin Pietersen, who has excellent record against India scoring 1581 runs in Tests at an average of 58.55 and 1138 ODI runs at an average of 45.52, remains England's highest run-scorer in all formats of the game.
The swashbuckler played 104 Tests and 136 ODIs in a career spanning nine years. He scored 8181 Test runs at an average of 47.28 and 4440 ODI runs at 40.73. The right-hander has 1176 runs in the 37 Twenty20 Internationals he has played so far.
"Playing cricket for my country has been an honour. Although I am obviously very sad the incredible journey has come to an end, I'm also hugely proud of what we, as a team, have achieved over the past nine years," Pietersen said.
"I feel extremely fortunate to have played at a time of great success for England cricket alongside some of the best cricketers the country has ever produced. I want to thank everyone for their fantastic support and I wish the team the very best of success going forward.
"I believe I have a great deal still to give as a cricketer. I will continue to play but deeply regret that it won't be for England," he added.
The dramatic announcement is being seen as an ECB move to forcefully end the controversial batsman's career. It also comes within days of Andy Flower stepping down as chief coach after being asked to by the ECB.
Newly-appointed ECB managing director Paul Downton said it was a "tough decision" to drop Pietersen as part of a rebuilding process which focusses on next year's World Cup.
"Everyone was aware that there was a need to begin the long-term planning after the Australia tour," said Downton.
"Therefore we have decided the time is right to look to the future and start to rebuild not only the team but also team ethic and philosophy."
"England cricket owes a debt of gratitude to Kevin who has proved to be one of the most talented and exciting players to ever represent the country and his 13,797 runs are a testimony to his immense skill," Downton added.
Pietersen, a player of South African origin, had a controversy-marred run with the national team, and was often criticised for having an "ego".
His rockstar image notwithstanding, Pietersen often complained of being a loner in the England dressing room and was even dropped from the team after sending messages critical of the then captain Alastair Cook to South African players.
Honoured with an MBE after a starring role in England's 2005 Ashes series, Pietersen created quite a storm some months later when he publicly demanded the sacking of then coach Peter Moores.
Eventually, Moores was sacked and Pietersen was laid off for a brief while before coming back into the side.
He was also at loggerheads with the ECB over his decision to participate in the lucrative IPL even when asked not to.
His sacking today drew sharp reactions with former captain Michael Vaughan criticising it.
"England lost 5-0 and need a huge scapegoat," he told BBC Radio. "You have to be able to manage mavericks. You can't have clones around."
Alec Stewart, cricket director at Pietersen's county team Surrey, said he'd been treated unfairly.
"When we were winning, we didn't hear anything. When we lose, everyone is pointing fingers at KP -- and I find that unfair and unjust."