A few TV channels flashed the news of his retirement, forcing the Test discard to come up with clarifications.
"I am already out of the Pakistan team and haven't played top class cricket for a while now so what is the purpose of me announcing any retirement," the 38-year-old cricketer said.
"The selectors are not considering me for selection and frankly speaking I haven't had the chance to play regular cricket for a while now," he added.
Yousuf last played for Pakistan in an ODI against South Africa in Abu Dhabi in November, 2010.
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"I would like to see more young players coming up and establishing themselves in the team. If that happens than I will consider my decision to sideline myself was correct."
Yousuf said he was also willing to take up any assignment of batting coach or consultant by the Pakistan Cricket Board.
"It would be a new experience working as batting coach with the team. I would definitely like to look at this opportunity if it comes my way," he said.
Yousuf is one of Pakistan's leading batsmen with 7530 runs in 90 Tests and 9720 runs in 288 one-day internationals with a total of 39 hundreds.
Chief selector Iqbal Qasim said he was surprised by the news of Yousuf's retirement.
"He has served Pakistan cricket diligently and if he wants to play domestic cricket to prove himself we will definitely follow him with interest," he said.