Rosberg, who only signed a two-year extension to his Mercedes contract in July, made the shock revelation in Vienna as he prepared to receive his champion’s trophy at the FIA prize-giving ceremony.
The 31-year-old German initially informed only a handful of people – including his great rival Lewis Hamilton – of his stunning decision, before revealing he first pondered retirement after he took control of the championship battle with victory at October’s Japanese Grand Prix.
Rosberg’s move leaves Mercedes, Formula 1’s all-conquering team, who have won 51 of the last 59 races, with a vacancy for 2017. At this stage, it is unclear who they will choose to partner Hamilton.
Toto Wolff, the Mercedes boss, insisted the team would begin their search for a replacement next week.
Four-time champion Sebastian Vettel of Ferrari and McLaren’s double world champion Fernando Alonso have been mooted as mouth-watering candidates, but both drivers are under contract with their respective teams next season.
Pascal Wehrlein, a protege of the Mercedes junior driver programme, and Valtteri Bottas of Williams are also in the frame.
Rosberg, who becomes the first reigning Formula 1 champion to retire from the sport since Alain Prost in 1993, said he is now looking forward to the next chapter of his life with wife Vivian, and their one-year-old daughter Alaia.
“Since 25 years in racing, it has been my dream, my ‘one thing’ to become Formula 1 world champion,” said Rosberg, who started his career with Williams in 2006.
“Through the hard work, the pain, the sacrifices, this has been my target. And now I’ve made it. I have climbed my mountain, I am on the peak, so this feels right.”
Rosberg emulated his father Keke, the 1982 world champion.
Hamilton’s reaction: Page 6.