The Scottish veteran, at 37 the oldest racer on the grid, said in a media statement he will thereafter remain involved in the sport as a consultant to his current team, Red Bull, "focusing on testing and development of the cars".
"I have an open mind as to whether or not I will compete again in the future, in some other form of motor sport, so I am definitely not hanging up my helmet!" he added.
Coulthard, who made his debut for Williams in 1994 and has won 13 races, said he made the decision to retire earlier this year because he wants to "stop while I am still competitive and enjoying" his job.
He will test for Red Bull Racing following his retirement as a formula one race driver at the end of the 2008 season, team boss Christian Horner said on Thursday.
"Red Bull Racing will still be utilising his services and he will on occasion drive the car in test sessions for us so that we can draw upon his vast experience and knowledge," Horner confirmed in a statement.
Horner said Coulthard will also be a consultant to the technical group.(GMM)