Scotland's most-capped scrum-half has represented his country on 85 occasions, 14 of them as captain.
In a statement released by the Scottish Rugby Union, Blair said: "I'm in the very fortunate position of being able to decide myself when my international career ends. For me, that time is now."
Blair, who left Edinburgh in the summer to sign for Brive, revealed his decision was partly based on his family circumstances and also to give the national team the chance to plan ahead for the next World Cup.
The former British and Irish Lions player said: "There's no doubt that moving our family to France has played a part in my decision.
"Our son Rory is now at school here and we have an 11-week-old daughter, Lucy, who was born in Brive.
"However, it's a combination of reasons that's led to my standing down from international rugby, not just one factor.
"For me a place in the squad at the Rugby World Cup in 2015 is not a realistic personal target and, with that in mind, it's right for Scottish rugby and the Scotland team, that other players gain experience in a pivotal position."
Blair was a regular for Scotland last year and captained the team for the final time in June in the victory over Samoa.
He added: "The fact that I still feel attuned to playing at international level has made the decision harder but it's not been reached lightly and I'm very confident that it's the right decision."
- Sports & Recreation
- Scottish Rugby Union