Stevens has won 44 caps for his country and played at the 2007 and 2011 World Cups.
But the 29-year-old feels he cannot commit himself through to the next World Cup in England in 2015.
He said in an RFU statement: "This is one of the most difficult decisions I have had to make. Playing for England has been the ultimate honour and I have been very privileged and proud to wear the white shirt and play with some great players."
Stevens added: "I believe England under (head coach) Stuart (Lancaster), Graham (Rowntree) and Andy (Farrell) are heading in the right direction towards 2015 and I remain a huge supporter of what they are doing.
"But I have a young family and, conscious that I would not be able to commit to the World Cup in three years, I have decided that the time is right to call it a day and to focus on my rugby at Saracens."
Stevens had been named in Lancaster's Elite Player Squad for the coming season, and the head coach will need to choose a replacement for the 2005 Lions tourist.
Lancaster said: "On behalf of England Rugby I want to thank Matt for his contribution over the years. He should look back on his international career with pride. I am sure he will continue to be successful with Saracens and beyond."
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