"At (almost) 33 years old, for the role I have in football, it's right to give my spot to people with more energy," the 2006 World Cup winner told a news conference on Saturday.
Asked if this meant he would retire from Italy after the tournament, he added: "Yes".
Gattuso, who turns 33 in January, was a key part of Italy's 2006 success because of his larger-than-life character and motivational qualities.
Never the most gifted of footballers, he made up for his deficiencies going forward by snapping at the most famous of heels and making sure he won the ball back as often as possible.
A serious knee injury halted his career two years ago and although he does not run amok like he used, that edge remains.
"The nastiness is still there," he said with a broad smile, adding he would "bet on Italy" to do well again this time despite widespread scepticism from fans and media.
In Italy, Gattuso is nicknamed Rino, a shortened form of Gennaro, but the similarity to the word "rhino" and his own likeness to the charging animal have transformed the moniker.
His chances of starting in Italy's Group F opener against Paraguay in Cape Town on Monday look remote unless a minor calf problem for fellow midfielder Daniele De Rossi becomes serious.
Italy coach Marcello Lippi has said it is worth having Gattuso in his squad whether he plays or not given he likes to encourage younger players and adds colour to the dressing room.
Gattuso, who has 72 caps and made his debut in 2000, was not always a regular at AC Milan last season but he blamed his poor campaign on himself after rushing back from the knee problem.
"Lippi has given me a great chance but we know that my season has not been brilliant or fantastic. Everyone has seen that," he said.
"It was me who ruined it with my own hands. I played (last June's) Confederations Cup with one leg. It's my fault."
Gattuso, often seen as Italy's off-field captain, will be joined in international retirement by real skipper Fabio Cannavaro, 36, after South Africa.
The midfielder is enjoying his last experience at a World Cup but security issues around the team's base upset him.
"Every time you move you have to have an escort or police, it's horrid. But all the rest is great. The South African people's happiness is amazing," he said.