The 37-year-old will not travel with the team for the remaining two ODIs of the series, which Zimbabwe has already conceded 0-3 to India.
"I was going to wait until my contract expired to call it a day but, yes, I've decided to retire from international cricket," Price told a leading cricket website.
"I won't be going with the guys to Bulawayo. I'm retired."
Price was not originally included in the side for the series but coach Andy Waller said he remained an integral part of the side. He was expected to be given at least one game before calling time.
Price finishes his ODI career with 100 wickets in 102 matches along with the 80 scalps in 22 Tests. He also has 13 Twenty20 wickets in 16 matches.
"Pricey's called it a day," Zimbabwe captain Brendan Taylor said.
"If he was going to play it was going to be here in Harare. We're going to miss his experience, but in saying that it does give our young spinners who are coming through a great opportunity," he added.
Price, who made his debut at 23, went into exile for three and a half starting 2003 when he aligned with the then skipper Heath Streak in protest against alleged racial discrimination in the national team.
Price's most recent success came in the 2011 World Cup in India where he was leading bowler for Zimbabwe with nine wickets at 18.77.
His last match for Zimbabwe was the Bridgetown Test against West Indies in March this year.
"He's a hell of a competitor. He's a guy that plays with his heart on his sleeve. He leaves nothing out on the field, he'll give you everything and he's a real team man. Unfortunately age is not on his side anymore, and he's moving on with his family," Taylor said.
"We'll miss him, but I'm sure he'll still be in the picture with our young spinners coming through and I'm sure he'll always be contributing somewhere along the line."
Zimbabwe spinner Ray Price retires from international cricket
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