The speed specialist won two golds at the 1998 Nagano Olympics, and earned three world championship titles. He won 54 World Cup races and four overall titles, putting him second only to Sweden's Ingemar Stenmark, who captured 86 race victories.
"I gave it a lot of thought, but decided spontaneously that now is the best time for retirement," he said.
The 36-year-old Maier had knee surgery after the World Cup season ended in March, and only began training on skis this month.
"I am healthy now and that's the way I want to live on," said Maier, while fighting back tears at a news conference.
Maier's career nearly ended after a horrific motorcycle accident in 2001, which kept him sidelined for almost two years. Doctors contemplated amputating his lower leg after the crash, but the Austrian returned to win the overall and super-G World Cup titles in 2004.
The Austrian ski federation said Maier will stay involved in the sports.
"It would be great if Hermann could share his great experience with the younger guys on the team," the federation's Alpine director Hans Pum said.