The 35-year-old allrounder played 74 ODIs for Australia but had only been selected once since playing in the victorious 2023 World Cup campaign in India.
Stoinis was named in the preliminary squad to play two ODIs against Sri Lanka in Colombo and the Champions Trophy in Pakistan.
But on Thursday he announced his decision to retire from the format in order to focus on Twenty20 International cricket.
Stoinis remains a highly rated T20 player, most recently earning selection in the Big Bash League's team of the tournament for helping the Melbourne Stars back to the finals.
"This wasn't an easy decision, but I believe it's the right time for me to step away from ODIs and fully focus on the next chapter of my career," Stoinis said.
"I'll be cheering the boys on in Pakistan."
Stoinis played his last ODI against Pakistan last November and retires with a batting average of 26.69, including an unbeaten 146 against New Zealand in 2017.
He took 48 ODI wickets at an average of 43.12.
Australia is now likely to make yet another change to its squad for the Champions Trophy that begins in Pakistan later this month.
Mitch Marsh has already been ruled out with a back injury and pacemen Pat Cummins (ankle) and Josh Hazlewood (side) also look unlikely to recover from their own fitness concerns.
Australia have until February 12 to finalise their replacements for a campaign that begins against England on February 22.
Spencer Johnson and Jake Fraser-McGurk are favoured as options to earn call-ups, with Steve Smith likely to assume the captaincy in the absence of Cummins and Marsh.
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