Oswalt's agent, Bob Garber, confirmed Oswalt's retirement Tuesday and said the pitcher would come to work for his agency.
Oswalt, 36, had a 163-102 career record with a 3.36 ERA. His best season came with Houston in 2004, when he went 20-10 with a 3.49 ERA. The durable righty - a three-time All-Star and 2006 NL championship series MVP - went over 200 innings seven times in his career but dealt with injuries in recent years.
He was 0-6 with an 8.63 ERA in nine outings and six starts for Colorado last year. He signed a minor league deal with the Rockies in May 2013 and missed time with a strained left hamstring.
A 23rd-round pick by Houston in the 1996 amateur draft, Oswalt pitched his first nine-plus seasons for the Astros and then played for Philadelphia, Texas and the Rockies.
AP Sports Writer Ronald Blum contributed to this report.