In a video on his newly created Instagram account, Vettel explained his decision, saying: "I love this sport. It has been central to my life since I can remember.
"But as much as there is life on track, there is my life off track too. Being a racing driver should not be my sole identity.
Next to racing, I have grown a family and I love them. I have grown other interests outside of Formula One.
"My passion for racing and Formula One comes with lots of time spent away from them and takes a lot of energy.
"Committing to my passion the way I did and the way I think it is right, does no longer go side by side with my wish to be a great father and husband.
"The energy it takes to become one with the car and the team, to chase perfection takes focus and commitment.
<b>"My goals have shifted from winning races and fighting for championships. </b>
The Aston Martin driver has won 53 races and has stood on the podium 112 times in 289 starts. He has driven for BMW Sauber, Toro Rosso, Red Bull Racing and Ferrari as well as Aston Martin since 2007.
His biggest achievements came with Red Bull where, between 2009 and 2013, he won four straight world titles, becoming just the fifth driver to win four or more.
His first race win came in his first full season in the sport - with Toro Rosso - where a masterful drive from pole in wet conditions at Monza saw him show his full potential to the world.
After that, a transfer to Red Bull a year later helped him win more and more races as well being crowned the youngest world champion in history.
He would move to Ferrari in 2015 looking to bring the world championship back to the Scuderia. However, despite race wins, he was unable to overthrow the might of Mercedes during hs five years with the Prancing Horse.
Ahead of the 2021 season, Vettel replaced Sergio Perez (32) at Aston Martin. He would take their first podium at the Azerbaijan Grand Prix, finishing second behind Perez - his final podium in the sport at the time of writing.
In recent times, Vettel has been pushing progressive agendas in Formula One, such as LGBT+ rights and climate change. From his explanation, this seems to be where his future lies alongside spending more time with his family.
He added in his video: "I feel we live in very decisive times and how we all shape these next years will determine our lives.
"My passion comes with certain aspects that I've learned to dislike."
He had one final message for the F1 community: "Thank you for letting me share the track with you," adding on the Aston Martin website: "Today is not about saying goodbye.
"Rather, it is about saying thank you - to everyone - not least to the fans, without whose passionate support Formula One could not exist."
Lawrence Stroll, the chief executive at Aston Martin F1 team and father of their other drive Lance, said of Vettel's retirment: "I want to thank Sebastian from the bottom of my heart for the great work that he has done for Aston Martin Aramco Cognizant Formula One™ Team over the past year and a half.
"We made it clear to him that we wanted him to continue with us next year, but in the end he has done what he feels is right for himself and his family, and of course we respect that.
"He has driven some fantastic races for us, and, behind the scenes, his experience and expertise with our engineers have been extremely valuable. He is one of the all-time greats of Formula One, and it has been a privilege to have been able to work with him.
"He will continue to race for us up to and including the 2022 Abu Dhabi Grand Prix, which will be his 300th Grand Prix entry. We will give him a fabulous send-off."
