Jones, who won selection at the age of 14 for the 2000 Sydney Games, signed off at London with a silver in the 4x100 metre medley, her ninth Olympic medal matching the Australian record haul of Ian Thorpe.
"It's a very hard decision to come to and I took my time after London to make sure it was the right decision," the specialist breaststroker said.
"And I have come to the conclusion that I ticked every single box that I ever wanted to in my career and there is nothing more that I could ever achieve."
Born in Katherine, a remote rural town in northern Australia, Jones was discovered by former coach Ken Wood at a Brisbane pool where her mother worked as a cleaner.
Jones burst onto the world scene as a 15-year-old at the Sydney Games, winning silver in the 100m breaststroke and 4x100 medley to become her country's youngest Olympic medallist.
Her achievements and telegenic looks brought crushing pressure along with instant celebrity, however, and she was savaged by Australian media after her failure to win individual gold at the 2004 Athens Games and accused of being graceless in defeat.
After admitting to depression and self-esteem issues, Jones split with Wood and embarked on a four-year period of dominance under Swiss coach Stephan Widmer, capturing the 100 and 200 world titles in Montreal in 2005 and defending them successfully in Melbourne two years later.
Jones captured a long awaited individual Olympic title with gold in the 100 breaststroke at the 2008 Beijing Games along with a 4x100 medley relay title but took a year-long sabbatical the following year to take a beauty school course.
Jones returned to the pool to take a world silver medal at Shanghai last year before becoming the first Australian swimmer to qualify for a fourth Olympics at trials in March.
Jones's final Games was marred by controversy, with her physique under scrutiny by Australian media and some pundits labelling her a 'tourist' in her Olympic swansong.
The seven-times world champion denied the attention played any part in her decision.
"This decision is from my heart and it has probably been coming for a little while," said Jones, who will remain involved in swimming with coaching clinics and is pondering studying psychology at university.
"I feel like an 18-year-old again."
- Sports & Recreation