After 14 years playing for The Baggy Greens, Watson will end his association with the all forms of the international game when Australia's involvement in the tournament concludes.
Watson will however continue to play for his domestic side Sydney Thunder. He will also play for Royal Challengers Bangalore and Islamabad United in the Indian Premier League and Pakistan Super Leagues respectively.
Watson retires as current T20 no.1 all-rounder
At 34 years of age, Queensland-born Watson has played 339 competitive matches in all forms of the game, including 59 tests, 190 One Day Internationals and 52 T20s and is the current number one all-rounder in the T20 rankings.
'Watto' as he is known, notched four test match tons with a top score of 176 and an ODI one of 185 n.o. In the bowling department, Watson has 75 test wickets to his name.
Having debuted in 2002 for Australia in their ODI versus South Africa, Watson made his test debut versus Pakistan at the turn of 2005. His test career however was overshadowed somewhat by injury.
'Watto' calls time on illustrious career
The Ipswich man holds many a record in the limited overs form of the game. Awarded the Allan Border Medal in 2010 and 11, becoming only the second player for his country to win back-to-back awards after his former captain Ricky Ponting.
He has won six awards in the Player of the Year category in test, ODI and T20 versions of the sport and as such, in the only player to have been awarded the honour in all formats.
Watson was declared man of the series in the 2012 World Twenty20 in the Caribbean - despite losing to England in the final. He is the only player also, to win four consecutive Player of the Match commendations in ICC event history.
With the burdens of test match cricket having made its' toll of Shane Watson, his decision is perhaps a logical one. Able to play three existing forms of lucrative domestic cricket, his retirement is not a surprising one.
Watson has just the one Ashes winning medal under his belt - something which he may look back on as a missed opportunity.
Part of the winning squad during last years Cricket World Cup - beating antipodean rivals New Zealand at the MCG, Shane Watson now has the perfect chance to sign off by lifting the T20 trophy at Eden Gardens on April 3.