Wagner said he is making his plans known early this season so the Braves can have time to prepare for 2011.
Wagner, 38, plans to retire even though he has a $6.5 million option to play in 2011.
He said the extra time he spent with his wife and four children while recovering from elbow ligament-replacement surgery in 2008 made it more difficult to be away from his Virginia home.
"I think when I was home with the kids I just enjoyed it, probably too much," Wagner said. "It's where I want to be and I think it's something else the Lord has got for me to do and I'm going to go that way."
Wagner used an off day on Monday for a quick trip to his home in Crozet, Va., near Charlottesville. The Braves open a series at Washington on Tuesday.
Braves general manger Frank Wren said Wagner's decision is not a complete surprise.
"We knew this was a possibility from the beginning," Wren said Monday. "We respect Billy's desire to be with his family and we are glad he is with us this year."
The 2011 option for Wagner kicks in if he finishes 50 games this season. He is 1-0 with two saves and a 2.00 ERA in his first season as the Atlanta Braves' closer.
Wagner has proved he has made a full recovery from his elbow surgery. The left-hander's fastball still hits the upper 90s on the radar gun.
He is sixth all-time with 387 career saves, including two this season.
Wagner is chasing John Franco's record of 424 saves by a left-hander. In spring training, Wagner said he was motivated by the record, but now he says he'll retire even if he falls short of that mark this season.
Wagner said he told manager Bobby Cox of his decision on Friday so the Braves would know what to expect when preparing for next season.
"I really just wanted to make sure they know where I stand so if something comes up and they have to make a move they're not caught off-guard," Wagner said.
Wagner said he didn't discuss the possibility of retirement during contract negotiations with the Braves last winter.
"No, I didn't think it was the time," he said. "I thought we should go on and get playing and see where it goes. We were planning to tell them at the right time."
Wagner said his decision so early in the 2010 season was not an indication he is not satisfied with his performance.
"It has no bearing on how I'm pitching," he said. "I just think it's the right time. I'd like to be able to go out when I feel halfway decent and not laboring to get through seasons and then I can enjoy my family when I'm done."
Wagner made his debut with Houston in 1995 and remained with the Astros through the 2003 season, when he set a career high with 44 saves. He was Philadelphia's closer for two years before four years with the Mets. He had elbow surgery in September 2008, and returned with the Mets last season before he was traded to the Boston Red Sox.
He has a 2.38 ERA in 791 career games.
Wagner and his wife, Sarah, have three sons and one daughter, ages 3 to 11.
He had a quick answer when asked about his plans for retirement.
"I'm going to be a Little League coach with my kids," he said. "I enjoy it. I enjoy being around them and being on the farm and want to do a lot of stuff with my church. That's really what I want to do, just slow it down and see what comes along."
The Braves don't have an obvious closer in line for 2011.
Takashi Saito, also in his first season in Atlanta, has been a closer in his career, but he is 40. Peter Moylan, 31, has been effective in a set-up role but has only two career saves in his five years with the team.