Mussina is scheduled to address the media on a conference call at 4 p.m. ET.
Mussina, who turns 40 next month, spent the last eight seasons with the Yankees after pitching for the Baltimore Orioles for the first 10 years of his career.
His 270 wins rank second among all active right-handers, behind only Greg Maddux.
In the final start of his career, he pitched six shutout innings against the Boston Red Sox to finish off the first 20-win season of his career.
According to the Elias Sports Bureau, he's just the fifth pitcher since 1900 to win 20 games or more in the final season of his career -- and the first since Koufax. He's the only pitcher in that group to win his 20th game in his final start.
The Yankees had indicated they were interested in bringing Mussina back if he wanted to keep pitching. But they had also suggested they might need to wait to see if they could accomplish their goal of signing at least two other free-agent starters this season -- an indication they weren't counting on Mussina to return from the beginning.
Mussina's retirement was first reported by FoxSports.com.
ESPN.com senior baseball writer Jayson Stark and The Associated Press contributed to this report.