Tendulkar, the highest run-scorer in Test cricket history and the only player to make 100 centuries in international cricket, said he had been "living a dream" since making his debut in 1989 but recognised it was now time to call it quits.
"It's been a huge honour to have represented my country and played all over the world," the batsman said in a statement.
"I look forward to playing my 200th Test Match on home soil, as I call it a day."
India is to play a two-Test series against the West Indies next month which would enable Tendulkar, who has already made 198 appearances, to become the first player to reach the 200 landmark.
Tendulkar, 40, said he found it hard to imagine life without cricket "because it's all I have ever done since I was 11 years old."
"All my life, I have had a dream of playing cricket for India. I have been living this dream every day for the last 24 years," he said.
The right-handed batsman has scored 15,837 runs since his debut against Pakistan in Karachi in November 1989, although he has struggled for form in recent times. His 100 centuries in international cricket includes 51 Test tons.
His last Test match century came in January 2011 when India played South Africa and he retired from One-Day internationals late last year.
He also played his last Twenty20 match earlier this month in an appearance for the Mumbai Indians.
Tendulkar captained India for several years but the high point of his career came in 2011 when he was part of the Indian team to win the World Cup.
He was carried from the field by his teammates after the final in his hometown of Mumbai.
Known as the 'Little Master', Tendulkar has been widely hailed by his contemporaries as second only to the Australian legend Sir Donald Bradman in the pantheon of batting greats.
Australia's Shane Warne, who was considered one of his generation's finest spinners along with Sri Lanka's Muttiah Muralitharan, said that no one else came close to Tendulkar in his prime.
"Sachin Tendulkar is, in my time, the best player without a doubt -- daylight second, Brian Lara third," said Warne.
Tendulkar, who is an honourary member of parliament, has sometimes struggled to cope with his iconic status, but he made a point of praising his fans in his retirement statement.
"Most of all, I thank my fans and well-wishers who through their prayers and wishes have given me the strength to go out and perform at my best," he said.
Tendulkar first hit the headlines as a 14-year-old when he shared a then world record partnership of 664 runs in a school match with Vinod Kambli, who would also go on to play for India.
Legendary Indian opener Sunil Gavaskar once said he was convinced Tendulkar would achieve greatness when he first saw him bat in the nets more than two decades ago.
"It is hard to imagine any player in the history of the game who combines classical technique with raw aggression like the little champion does. There is not a single shot he cannot play," said Gavaskar.
FACTFILE ON INDIA'S RECORD-BREAKING BATSMAN SACHIN TENDULKAR
Full name: Sachin Ramesh Tendulkar
Right-hand batsman, right-arm spinner
Major teams: India, Mumbai.
Tests: Matches 198, Runs 15,837, Highest 248 not out, Average 53.86, Centuries 51, Half-centuries 67
One-dayers: Matches 463, Runs 18,426, Highest 200 not out, Average 44.83, Centuries 49, Half-centuries 96
Twenty20: Match 1, Runs 10, Average 10.00
- Most Test runs and centuries
- Most one-day runs and centuries
- Only batsman to score 100 international centuries
- Most World Cup runs (2,278)
- Most appearances in Tests and one-day internationals
- 1,000 or more Test runs in a calendar year six times: 1997, 1999, 2001, 2002, 2008, 2010
- 1,000 or more one-day runs in a calendar year seven times: 1994, 1996, 1997, 1998, 2000, 2003 and 2007
April 24, 1973 : Born in Mumbai
December 11, 1988 : First class debut aged 15 with a century
November 15, 1989 : Test debut v Pakistan, Karachi
December 18, 1989 : One-day debut v Pakistan, Gujranwala
August 14, 1990 : Maiden Test century v England, Old Trafford aged 17
December 10, 2005 : Overtakes Sunil Gavaskar's world record of 34 Test tons
October 17, 2008 : Overtakes Brian Lara as highest run-getter in Tests
February 24, 2010 : First batsman to score 200 in one-day cricket.
April 2, 2011 : World Cup winner with India
March 16, 2012 : Becomes only batsman to score 100 international tons.
Oct 10, 2013: Says he will retire from Test cricket after playing his 200th match. He has already retired from one-day and Twenty20 cricket.
TOP FIVE INNINGS:
- 119 not out v England at Old Trafford, August 1990
Tendulkar scored the first of his world-record haul of 100 international centuries as a 17-year-old in circumstances that would have tested the credentials of a Test veteran.
India were wobbling at 5-127 after being set 408 to win the second Test against England at Old Trafford, before the teenager defied the England attack for nearly four hours to help his team salvage a draw.
"I thought it came at the right time when India needed runs to save the game. The first century is always going to be memorable. It gave me the confidence," Tendulkar later told Indian magazine "Sportstar".
- 114 v Australia at Perth, February 1992
Tendulkar was still in his teens when he cracked a gem of a hundred on a bouncy Perth track against a lively all-pace attack comprising Craig McDermott, Merv Hughes, Paul Reiffel and Mike Whitney.
He hammered 16 fours in a magnificent display of strokemaking after being promoted in the batting order. India lost the match but Tendulkar won many a heart.
Among his admirers was legendary Australian batsman Don Bradman, who said the Indian reminded him of his younger days.
"It was a very important stage of my cricketing life. Australia was something special. Once you score runs in England and Australia, people in the world come to know about you, about what you have done," said Tendulkar.
- 111 v South Africa at Johannesburg, November 1992
India were struggling in unfamiliar conditions on their maiden tour of South Africa, but not teenager Tendulkar who showed his team-mates the way with an impressive hundred in the first innings of the second Test at Johannesburg.
He was the lone batsman to cope with the hostile pace attack, led by Allan Donald, as he batted for more than six hours and smashed 19 fours in a breathtaking display.
"I was thrilled making runs against South Africa. They had some big names and I was determined to come good. It was the beginning of their return to international cricket and they were trying hard as well," said Tendulkar.
- 155 not out v Australia at Chennai, March 1998
Tendulkar was involved in a fascinating duel with leg-spin wizard Shane Warne, who eventually came second-best in the battle of the superstars.
The Indian fell to Warne for four in the first innings, but made amends in the second with a strokeful 155 not out with four sixes and 14 fours to set up his team's victory.
The focus was also on Tendulkar's preparations. Days before the opening Test, he batted during practice sessions with a deliberate "rough" outside the leg-stump for the bowlers to replicate Warne's spin from round the wicket.
"Tendulkar has a touch of genius about him. But I wonder if people appreciate the amount of time he spends working on his game. Sachin plans well before every tour," Warne wrote in his book "Shane Warne's Century".
- 103 not out v England at Chennai, December 2008
In one of the most emotional moments in Indian cricket, Tendulkar masterminded a memorable win over England with an unbeaten 103 a few weeks after his home city of Mumbai was devastated by a series of attacks on November 26.
Set 387 to win on the penultimate afternoon, Tendulkar built on Virender Sehwag's brisk 68-ball 83 as India achieved the highest run chase on home soil and the fifth-highest in the history of the game.
The master batsman dedicated his century to the nation mourning the Mumbai attacks.
"Their loss can't be replaced, but I hope this win brings some cheer to those who lost dear ones in the attack," said Tendulkar.