The Australia-born 39-year-old has played 186 times for Ireland, skippering the nation in their breakthrough 2007 World Cup campaign and also appearing at the 2011 showpiece after stepping down as captain.
He will call time on his international and representative cricket career after the ICC Intercontinental Cup final in Dubai in December, which takes place following the World Twenty20 qualifiers.
"It's been a difficult decision and I've racked my brains ever since I came back from the United Arab Emirates in March," he said.
"It's becoming harder to recover after matches now, so much so that I can hardly walk for a couple of days.
"Indeed after that UAE tour, it took me a full week to recover and my young son Charlie and daughter Claudia were having to pull on and off my socks, so that was quite embarrassing!
"I knew then my time was limited and, although it would have been great to play in another World Cup in Australia, it was just beyond me.
"It's time to move on to new things and gives (coach) Phil (Simmons) the chance to find somebody to replace me."
Johnston is third on the all-time list of Ireland's leading wicket-takers with 264 at 23.13 - behind only Jimmy Boucher and Dermott Monteith - and is only one of three Ireland players to have taken a hat-trick. He has scored 2,398 runs at 21.04, with 10 half-centuries.