"I feel now is the best time to say goodbye," Johnson said.
"I have been lucky enough to have had a wonderful career and enjoyed every moment of playing for my country. It's been an incredible ride.
"But the ride has to come to an end at some point and to do so here at the WACA is very special."
The Queenslander moved west to live with wife Jessica Bratich, but the venue has always held special memories.
In his first six Tests at the WACA, Johnson channelled mentor Dennis Lillee to grab 42 wickets at an average of 20.19.
The 34-year-old finished with figures of 1-157 from 28 overs on Monday, failing to contain Ross Taylor and NZ's freewheeling tailenders.
It was the most runs ever conceded by an Australian in a Test innings at the WACA.
Johnson's bowling figures haven't always been a true reflection of his influence on a contest, but on this occasion it was.
"I've given the decision a lot of thought. Beyond this match, I'm just not sure that I can continue competing consistently at the level required to wear the Baggy Green," he said.
"My career has certainly had its up and downs but I can honestly say I have given it my all and am proud of everything I have achieved.
"To win an Ashes series and a cricket World Cup is something I will treasure forever.
"My family have been by my side throughout and I could not have achieved all I have without their support."
Johnson also thanked his teammates, friends and supporters around the world.
"The encouragement I have received has been extremely humbling and playing in front of them is certainly something I will miss," he said.
Johnson had a tally of 311 Test wickets going into the final day of the WACA Test.
Lillee (355), Glenn McGrath (563) and Shane Warne (708) are the only men above him on the list of Australia's greatest wicket-takers.
He finishes a two-time ICC Cricketer of the Year, having collected the gong in 2009 and 2014.
Johnson fell out of love with the game in 2011, when he genuinely weighed up retirement after a serious toe injury.
He battled back to full fitness and frightening pace, but again contemplated calling it quits following his side's failed Ashes campaign this year.
"I am sure there are many batsmen around the world breathing a sigh of relief right now, knowing that they no longer have to face him," Cricket Australia chairman David Peever said.
- AAP
