He said: "Having been left out of the current Test team and the one-day team earlier this year, I feel my chances of playing for Australia at age 37 have led me to this decision.

"While I feel very disappointed not to be playing for Australia again, I've been extremely lucky to have played for so long in such a great era of Australian cricket."

He added that he would still be available for first-class cricket.

Waugh has scored 8029 runs in a 128-Test career stretching over 12 years.

But in his last 12 Tests he has averaged a little over 30 and has not scored a century for 14 months.

Australia's chairman of selectors, Trevor Hohns, said: "Unfortunately, the contribution and the form of Mark hasn't been what he would like.

"Ultimately, in the end, it was not what we would like over the last 12 months, so we thought the time was appropriate."

Waugh lost his place in the team, which begins the first Test in Brisbane on 7 November, to South Australian Darren Lehmann.

The left-hander is Australia's all-time leading run-scorer in domestic cricket and toured with the squad for the recent Pakistan series.

"I am obviously sad for Mark who has been such a great player for Australia for so many years," said Lehmann, who played the last of his five Tests in 1999.

"But at the same time I am delighted and very grateful to get another chance at Test level."

The only other change Australia's selectors made to the side that beat Pakistan in last week's third Test in Sharjah was the inclusion of fast bowler Jason Gillespie.

Gillespie missed that match because of a calf strain but has been recalled pending a fitness test.

Otherwise, Andy Bichel looks likely to take his place.

Australia squad for first Ashes Test:

Steve Waugh (captain), Matthew Hayden, Justin Langer, Ricky Ponting, Damien Martyn, Darren Lehmann, Adam Gilchrist, Shane Warne, Brett Lee, Jason Gillespie, Glenn McGrath, Andy Bichel.