Vicelich played 63 times for New Zealand scoring seven goals.
The 31 year old told All Whites coach Ricki Herbert of his decision last week.
"It's never an easy thing to walk away from the All Whites jersey but I feel the time is right," Vicelich said.
After eight years of playing more than 200 league games in Europe his family wanted to return to New Zealand.
"I loved my time in Europe. Every kid dreams of playing professionally in Europe and I have been able to live that dream. But now it's time to be with my family."
Vicelich intends continuing to play domestically at New Zealand Football Championship level telling Radio Sport he was in talks "with a club in Auckland."