Army spokesman Col. Tom Collins said McChrystal, 55, notified the service of his plans. The general submitted formal retirement papers, but it is not clear when he will leave the service because the process usually take a few months.
In announcing McChrystal's ouster on Wednesday, President Barack Obama praised his long Army career but said his intemperate remarks in a magazine article that appeared last week could not be abided.
McChrystal apologized for the remarks in Rolling Stone magazine and flew to Washington last week to resign as commanding general of the war.
The chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, said Monday he backed Obama's decision to remove McChrystal because the "cumulative representation" of the magazine article revealed "poor judgment that included a bad command climate" that tolerated harsh criticism of the U.S. civilian leadership.
Speaking in Colorado at the Aspen Forum, Mullen said military leaders must always be mindful that they serve elected leaders. "We must ensure that we are adhering to that in every way — publicly, privately, formally, informally," he said. "To the degree that we tolerate it even in private discussions, it's corrosive."
The Army has been McChrystal's only career. He was promoted to the selective and coveted rank of four-star general last year. It is not clear whether McChrystal will be able to retain that rank in retirement. Under Army rules, generals need to serve three years as a four-star officer to retain that rank, with its prestige and retirement benefits.
The secretary of the Army can allow officers with as little as two years of service to keep their retirement rank, Collins said.
Three military and defense officials in Washington said Obama may use his power as commander in chief to allow McChrystal to keep all four stars. The officials spoke on condition of anonymity because they were not authorized to discuss the personnel matter.
McChrystal was the Pentagon's choice to run the war following a year of Taliban advances in 2008 and early 2009. He replaced Gen. David McKiernan, also a four-star Army general, after McKiernan was fired for failing to apply the counterinsurgency strategy McChrystal represented. McKiernan retired from the Army almost immediately.
The Senate Armed Service Committee will hold a confirmation hearing Tuesday for Gen. David Petraeus, nominated to succeed McChrystal as the top U.S. and NATO general in Kabul.
Associated Press writer Kimberly Dozier in Aspen, Colo., contributed to this report.