The former Leeds United, Liverpool and Galatasaray player signed with the Heart this season in a bid to keep his World Cup chances alive.
But he appears to have accepted he is not part of new Socceroos coach Ange Postecoglou's plans for the World Cup, which starts in June.
"I think his big dream was to go to the World Cup and he realises now that is not going to happen,'' said fellow former Socceroo Robbie Slater.
Another former Socceroos teammate, Mark Bosnich, praised Kewell's decision to call time on his career and described him as ``arguably one of Australia's greatest players ever''.
"He's done the admirable thing by retiring now,'' said Bosnich.
Kewell was the first Australian-born player to win the European Champions League when Liverpool clinched the 2005 title, and also claimed the FA Cup with Liverpool the following year.
He enjoyed some great moments playing for Australia, including his first goal for the Socceroos in the 1998 World Cup qualifier before an estimated 100,000 fans in Tehran, then his second goal in the return leg before 85,513 home fans at the MCG.
Kewell scored one of the penalties in the 2005 shootout against Uruguay at Sydney's Olympic Stadium that sent the Socceroos to the 2006 World Cup.
And he followed it with a man-of-the-match performance and 79th-minute goal in the 2-2 draw with Croatia in the second game at that World Cup before a foot infection ruled him out of the knockout stage loss to Italy.
Injuries dogged his career and his 2010 World Cup was far less memorable than his first.
Omitted by coach Pim Verbeek for the heavy opening loss to Germany, he was then sent off in the next game for handball on the line. Ghana converting the resulting penalty in a 1-1 draw.
-AAP