Midfielder Shaqiri, 32, who now plays with Chicago Fire in the United States, is Switzerland's second most-capped player after team-mate Granit Xhaka on 130 caps.
The former Bayern Munich and Liverpool winger made his international debut in March 2010 aged 18. He represented his country at four World Cups and three European Championships.
In what was his last game for the Nati, Shaqiri scored in the shoot-out as England beat Switzerland 5-3 on penalties following a 1-1 draw in their Euro 2024 quarter-final in Duesseldorf on July 6.
"Seven tournaments, many goals, 14 years with the Swiss national team and unforgettable moments. It's time to say goodbye to the national team. Great memories remain and I say to you all: thank you!", he said on social media.
Shaqiri retires as Switzerland's fourth top goalscorer with 32 goals, behind Alexander Frei with 42 and Kubilay Turkyilmaz and Max Abegglen on 34.
The Swiss Football Association (SFV) said most of his goals were "bangers".
Shaqiri first scored for Switzerland in a 3-1 defeat by England in Basel in 2010, in his seventh appearance.
He scored all three as Switzerland beat Honduras 3-0 in the 2014 World Cup in Brazil.
His final international goal came at Euro 2024, pouncing on a loose ball and blasting in the equaliser from outside the penalty box in Switzerland's 1-1 draw with Scotland in the group stage.
The strike means he is the only player to score in the last three World Cups and the last three Euros.
'Special moments'
The SFV governing body paid tribute to Shaqiri's imprint on the national football team.
"With Shaqiri, a big part of the Nati's history is gone. In recent years, the attacking midfielder was the man for special moments," the SFV said.
"We thank you with all our hearts for the many unforgettable commitments and the wonderful goals and assists in the national team and wish you the best for your future, and much success.
"You have touched and conquered our hearts with your game and your goals."
Nobody has scored more goals for Switzerland in finals tournaments than Shaqiri with 10: five in the Euros and five in World Cups.
"Only six other players have scored five or more goals at both the Euros and the World Cup: Michel Platini, Jurgen Klinsmann, Zinedine Zidane, Thierry Henry, Cristiano Ronaldo and Romelu Lukaku," said the SFV.
Born in 1991 in Kosovo, which was then part of Yugoslavia, his family emigrated to Switzerland in 1992.
Besides his international exploits, Shaqiri won the Champions League and the Club World Cup with both Bayern Munich and Liverpool, plus three Bundesliga titles and the Premier League.
He also won three Swiss league titles in his early years with Basel, in a career that has also taken him to Inter Milan, Stoke City and Lyon.
