Having recently battled various hamstring and Achilles injuries, the 32-year-old took to social media to break the news, reports Xinhua news agency.
"I am here to let you all know that I have decided to retire from my sport of athletics," she said on Tuesday.
"It has been a long 16 years, but also a fun and exciting 16 years. (But) it has come to the point where I believe my body won't be able to cope with the demands and intensity of training and competition."
Taking home gold at the 2012 London Olympics for the 100 metre hurdles, the Gold Coast native also won a silver medal at the 2008 Games in Beijing.
With a further two gold medals and one silver at World Championship meets, Pearson was inducted into Australia's Sports Hall of Fame in 2012 as a recognition of her athletic achievements.
Although it's not clear what Pearson's next career path will be, she has stated in the past that she may look to move into coaching role.
"I will definitely look into it. I have coached a few younger kids... and I have enjoyed it," she said.
"For me, coaching myself has been a wonderful journey and I want to continue that in the near future."
( With inputs from IANS )