Sambaran Banerjee, CAB selection committee chairman, said Ganguly had informed him about the decision during the Ranji league tie between Bengal and Delhi where the left-hander scored a superb century.
The southpaw, who quit international cricket in November 2008, would however, continue to play the Ranji one dayers for some more time.
Banerjee, who was the captain of Bengal when Ganguly made his Ranji debut in 1989-90, said, "Definitely it would be a big loss for Bengal which would be difficult to make up. He is still in very good nick. However, it is his decision."
In 46 Ranji matches that he has played, Ganguly scored a total of 3125 runs with eight centuries including two double tons. He also bagged 75 wickets.
Besides Ranji one-dayers, Ganguly will also be seen in IPL 3 as captain of Kolkata Knight Riders next year.