Tait, 28, who has just returned from the World Cup on the subcontinent, said he will step down from the national and South Australia one-day teams in an attempt to prolong his career.
"I have decided to retire from one-day cricket for both Australia and the South Australian Redbacks," Tait said in a statement released through Cricket Australia.
"This is not a decision I have taken lightly, but I believe it is one that will help me to prolong my cricketing career through the many Twenty20 avenues available.
"In reality, playing all year round for Australia and South Australia is not allowing my body to stand up as I would like and I do not want to be forced into retirement through career-ending injuries."
Tait said his goal was to help Australia retain the ICC Cricket World Cup, currently underway in India, Sri Lanka and Bangladesh.
"However, with our involvement now finished I feel it is the perfect time to move on in a new direction," said Tait, who was a member of Australia's 2007 World Cup-winning side.
Cricket Australia's General Manager Michael Brown said Tait had been an important contributor to Australia's shorter version of cricket over the last few years.
"Bowling at the speeds he generates places an unusual strain on his body and Cricket Australia respects the decision he makes today," Brown said.
Tait only played three Tests but in 35 ODI appearance he captured 62 wickets at 23.56.
Shaun Tait fastest ball (video)
