O'Toole, who turns 80 next month, announced his retirement in a letter to his fans, saying his heart was no longer in acting, the People magazine reported.
"It's time for me to chuck in the sponge. To retire from stage and screen. The heart for it has gone out of me; it won't come back," O'Toole said in a statement.
"...It's my belief that one should decide for oneself when it is time to end one's stay. So I bid the profession a dry-eyed and profoundly grateful farewell," he said.
The handsome actor was plucked from stage to play the lead in director David Lean's 1962 Academy-award-winning epic "Lawrence of Arabia' at the age of 27.
Oscar will continue to elude the actor despite best actor nominations for 1964's "Becket", 1968's "The Lion in Winter", 1969's "Goodbye, Mr Chips", 1972's "The Ruling Class", 1980's "The Stunt Man", 1982's "My Favorite Year" and 2006's "Venus."
He was given an honorary Oscar in 2003.
O'Toole said he was grateful for his "professional acting life, stage and screen,"
As it brought him "public support, emotional fulfillment and material comfort. It has brought me together with fine people, good companions with whom I've shared the inevitable lot of all actors: flops and hits."
The blue-eyed legend is focusing on the third volume of his memoirs.
