According to a senior BCCI official privy to the development, the 38-year-old Nehra has intimated his decision to chief coach Ravi Shastri and skipper Virat Kohli.
With ICC not slotting any World T20 in 2018, Nehra apparently told the team management that it is only fair that performing juniors have a longer rope.
It is understood that Nehra won't play even in the Indian Premier League's next season. Making his India debut back in 1999 under Mohammed Azharuddin, Nehra has so far played 17 Tests, 120 ODIs and 26 T20 Internationals for the country.
He has picked 44 Test wickets, besides 157 ODI and 34 T20 scalps.
"Yes, Ashish has told both Ravi and Virat that he does not want to continue beyond November 1 when India plays New Zealand at the Feroz Shah Kotla. Obviously, there is some element of surprise.
"One thought that he would like to continue till the home season against Sri Lanka. But he feels, it's the right time to move on," the senior official told PTI on Wednesday.
Nehra was recently picked for the three-match T20 International series against Australia but everyone was surprised when he did not figure in the playing XI for the first two matches.
"Bhuvneshwar Kumar and Jasprit Bumrah are form bowlers and Ashish felt that it's only fair in the interest of the team that they continue.
"Bhuvi has improved as a T20 bowler in leaps and bounds and Ashish said that the pair should continue. Had there not been a match at Kotla next month, Ashish would have retired after playing the third T20 International at Hyderabad on October 13," the official added.
The Feroz Shah Kotla T20 on November 1st will give Nehra a chance to finish his injury-plagued career at his home ground.
He is best remembered for his 6 for 23 against England at Durban in the 2003 World Cup, a match he played despite being unwell and frequently throwing up in between his overs.
He was also a part of the 2011 World Cup-winning squad with a match-turning performance in the semi-final against Pakistan. He missed the final due to a finger fracture.
It is learnt that a few IPL franchises want Nehra as their bowling coach-cum-mentor as his expertise and knowledge with white ball is considered to be unparalleled.