"I keep saying I'm going to retire. Well I am now," the 90-year-old told the BBC.
"I've figured, I've had a picture where I've played the lead and had incredible reviews... What am I going to do that will beat this?"
The Oscar, Golden Globe and Bafta-winning actor has an extensive filmography, including classic films ranging from Zulu and The Italian Job to more recently in Interstellar and The Dark Knight franchise, alongside Christian Bale.
He has appeared in more than 160 films over a career that has spanned seven decades.
In his final film, The Great Escaper which was released on October 6, he plays real-life World War Two veteran Bernie Jordan who escaped from a care home to attend D-Day celebrations in France.
"The only parts I'm liable to get now are 90-year-old men. Or maybe 85," he told BBC Radio 4's Today program.
"They're not going to be the lead. You don't have leading men at 90, you're going to have young handsome boys and girls. So I thought, I might as well leave with all this."
Sir Michael said he had turned the film down three times before accepting the role as he considered himself retired.
He stars alongside Glenda Jackson, who died in June after the completion of the film.
His announcement comes a month before Sir Michael's novel Deadly Game is scheduled for release.
The novel follows the adventures of DCI Harry Taylor, a detective with no respect for red tape or political reputations.
Sir Michael said in June: "It's been my ambition for years to write a thriller. It's the genre I most love to read and I've really got a buzz out of working on Deadly Game and teaming up with Hodder once again to publish it.
"I hope readers enjoy getting to know Harry Taylor as much as I did."
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