The 37-year-old Scotsman has driven his Renault for the Red Bull team since 2005 and plans to continue in a testing and development role.
"My decision to retire was taken earlier in the year and is based on a desire to stop while I am still competitive and enjoying the immense challenge that Grand Prix driving represents," Colthard said in a statement. "I will remain actively involved in the sport as a consultant to Red Bull Racing focusing on testing and development of the cars (and) I have an open mind as to whether or not I will compete again in the future, in some other form of motorsport."
Coulthard won 12 F1 races in a nine-year stint with McLaren and finished as high as second in the driver standings as runner-up to 2001 champion Michael Schumacher.
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