The 35-year-old affable pacer, who retired from Test cricket in 2010, had been most recently laid low by a calf injury. Lee, a part-time bass guitarist who enjoys a huge fan-base in India, said he could not carry on anymore given the suffering his body has endured.
"It has been a dream career, I guess, 13 years at the top. I couldn't ask for much more," Lee told 'Channel Nine'.
Lee said he had initially planned to retire after the upcoming World Twenty20 tournament in Sri Lanka.
"Thirteen years, Friday the 13th, it's appropriate for me to go. I woke up this morning after not much sleep and it's the right time to go.
It just came to me this morning and I just felt it's the right time to leave the game. "It's been in the back of my mind for a few months." Lee said he was happy to have played "in a fantastic era, playing with the likes of Shane Warne, Glenn McGrath and Adam Gilchrist, Steve and Mark Waugh, heroes of mine growing up".
"It's now stage two of my life coming up so I'm pretty happy and pretty excited. My holiday will be at home, I'm sick of being away."
The paceman retired from Test cricket in February 2010 after taking 310 wickets in 76 matches. He continued playing for Australia in one-day matches and in the Twenty20 arena.
International retirement notwithstanding, Lee will continue playing in the Australian Big Bash and Indian Premier league.
Rated among the most fearsome fast bowlers in modern era, the ever-smiling six-footer took 380 wickets in 221 one-day internationals and 28 wickets from 25 Twenty20 appearances for Australia.
Interestingly his Test career began against India, a country he frequents for reasons beyond cricket.
It was a sensational debut in 1999 as Lee grabbed seven wickets -- five in the first innings itself to announce his arrival at the international stage.
But the promise he held out at the start of his career was hampered by frustrating injury breakdowns. The speedster underwent as many as four surgeries on his right ankle itself besides enduring shoulder problems.
However, that didn't affect his commercial appeal either in Australia or India, where he collaborated with the legendary Asha Bhonsle for a hit song and made a cameo appearance as himself in a Bollywood movie.
He was a member of the 2003 World Cup-winning team in South Africa but missed the next edition in the West Indies due to an ankle injury.
"I look back to when I was 19, and while I hope (my injuries) never happen to anyone else, it's a fact that when you bowl fast injuries happen," he has said.
"You have to deal with it and you have to learn from what's happened because it makes you a stronger person. I have a saying 'if you're not living on the edge you're taking up too much space' it means have a crack.
" Lee's decision to retire leaves him just one wicket shy of Glenn McGrath's Australian record of 381 ODI scalps. In fact, In nine Tests following McGrath's departure, Lee clinched 58 wickets at 21.55 and also won the Allan Border Medal in 2008.