The 35-year-old former skipper announced his exit ahead of the second Test against England at The Oval next week.
He played in the Black Caps' defeat in the first Test at Lord's, making 0 and 18.
"I've thought about it for a while, but over the last few days it's become clear now is the right time," he said.
"I've always felt a strong drive and hunger for international cricket, and I take pride in knowing I've given it my all in every match I've played for New Zealand.
"Continuing with anything less wouldn't be right and I feel fortunate to step away on my own terms.
"I leave feeling optimistic about where this group is heading," he added. "There's a huge amount of talent and a real desire to do something special with this New Zealand team."
Williamson made his international debut in 2010 and played 378 games for his country, finishing as New Zealand's all-time leading run-scorer with 19,346, including 48 centuries and six double-centuries.
He played 110 Tests, smacking 33 centuries, on his way to 9,515 runs at an average of 54.06.
His leadership style was much admired as he captained the side in all three formats during a golden period from 2016 to 2024.
During that time, they made two World Cup finals, three semi-finals, and won the inaugural World Test Championship in 2021.