The former captain will bring the curtain down on a 17-year Test career with this weekend's match against South Africa.
"I know I have given cricket my all, it's been my life for 20 years," he told a hastily-called press conference at the WACA ground in Perth this morning.
"There's not much more I could give."
Ponting has failed in three innings against the Proteas during draws in Brisbane and Adelaide and pressure has been building on the veteran ahead of the crucial series decider.
Selectors had backed him despite his lacklustre performances, but the 37-year-old has decided it is time to lift stumps on a career which saw him become the world's second-highest run scorer.
"Over the last couple of weeks my level of performance hasn't been good enough," said Ponting, who had already been dumped from the one-day and Twenty20 international squads.
"My passion and love for the game hasn't changed but at the end of the day (the decision) was based on my results.
"In this series so far they have not been up to the level required of batsmen and players in the Australian team," he added.
"I'm glad I have got the opportunity to finish on my terms."
Ponting insisted the decision was entirely his own and he had not been pushed by selectors. The normally stoic batsman, affectionately known as Punter, admitted he was highly emotional when he told his teammates.
"I tried to say a lot but I didn't get much out," he said.
"They'd never seen me emotional before, but I was this morning."
Michael Clarke, the current captain, was close to tears following Ponting into the press conference, saying his friend and mentor would be sorely missed.
"I didn't have a feeling it was coming," Clarke said.
"Ricky spoke to me after Adelaide and obviously made his decision over the last few days.
"The boys (in the team) are obviously hurting right now. He's been an amazing player for a long time."
Perth, the ground here he debuted against Sri Lanka in 1995, will be a fitting place to end a remarkable international career, although Ponting will continue to play for Tasmania in the domestic competition this summer.
His involvement in the weekend contest with South Africa will see him Steve Waugh's record of 168 Test matches — the most in the history of Australian cricket.
After being made captain in 2004, right-hander Ponting went on to become one of the country's greatest cricketers, winning more Tests as skipper (48) than any other Australian.
The Tasmanian has 13,366 Test runs to his name, including 41 centuries at an average of 52.21, with only Indian legend Sachin Tendulkar scoring more.
Cricket Australia chief James Sutherland paid tribute to Ponting, describing him as one of the best players ever to play for his country.
"Ricky has had an extraordinary career and has made an extraordinary contribution, including through the example he has set for other elite players and through the excitement he has given fans, young and old," he said.
"I think his record until he retired as captain was outstanding but my respect for him since then has actually increased, seeing first-hand how he stepped back to become a total team player."
Ponting said he would take time to decide what to do in his Test retirement, but Sutherland said he hoped he would remain connected to the game "in an official capacity".
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