Wagner, 37, made the emotional decision following a tough conversation with coach Gary Stead last week where it was confirmed he was not in New Zealand's best XI for the upcoming series against Australia.

He announced his retirement at a press conference alongside Stead at the Basin Reserve in Wellington on Tuesday having been invited to be part of the squad for the first Test.

Wagner will continue to play first-class cricket but felt like the time was right to step away from the Test arena.

"I knew the time was coming near," Wagner said. "They sometimes say when you think about retirement, you're screwed in a way. I knew the time was going to come and it was going to come close. In the last week, reflecting and looking into the future, looking at the Test matches that are to come, I thought it was the right time to step down and let the other guys come in and do what we've been doing as a group for a number of years and obviously grow that attack.

"It's never easy. It's an emotional road. It's a big roller coaster. But it's something that I feel like the time to come in to pass that baton on and leave that Black Cap in a good place for the rest to take it and hopefully grow their legacy forward."

Wagner and Stead held a conversation after New Zealand's Test series win over South Africa in Hamilton, which has turned out to be Wagner's final Test, about his future within the Test side. Wagner was initially not going to be part of the build-up to the Australia series at all but the team invited their talismanic fast bowler down to be part of the first Test against Australia even though he wouldn't play.

"I wasn't going to be down here," Wagner said. "I think it's a very nice way for the team...they invited me to come down here and spend this time with them to celebrate it but also help them prepare for the series to get stuck in against Australia and it was a really nice, kind gesture.

"And I thought it'd be a nice way to bow out, doing what I've always been doing, to come here, be here with the team, do everything with a smile on my face and service the lads. That's just who I am. And it's a pretty nice gesture and I'm really, extremely grateful to be here and that the team and everyone and Gary has asked me to do this."

Stead said it had been difficult to tell Wagner that he was not part of New Zealand's plans moving forward.

"Very, very tough conversations to have," Stead said. "Neil understood. As he said, he was very grateful for his time in the Black Cap which I think is enormously big of him as well. I think it's taken a bit of time for Neil just to work out what this means for him as well and it's not retiring from everything. He's still available for domestic cricket, just retiring from international cricket. But they're incredibly tough conversations. Especially with the calibre of the guy that's next to me as well and everything he's done for the team."

"I will never forget walking out to bat with Ish in that draw at Hagley, it came up on the screen, they were talking about it," Wagner said. "Mark Richardson mentioned something about 30-odd years and I thought gosh, that's how old I am, since we last won a Test series against England. So that really sparked me up to try and go and do what I did out there. Myself and Ish found a way. That was a pretty special series to be a part of.

"And then no doubt obviously the World Test Championship final was something you can never take away. It's a pretty special moment to take in. And then that last Test here last year will definitely be one in the memory box to stick around for a long time."

Wagner broke down in tears as he thanked his family, his friends, coaches, and mentors who helped him along the journey. He said he hoped the New Zealand public would remember him as someone who gave his all for the cap.

"I've said this in the past, I never saw myself as the most talented or most gifted bloke going around in cricket," Wagner said. "I just saw myself as someone who loved this game and loved playing for this team, loved playing for my mates and for that Black Cap and I wear my heart on my sleeve. I know that I had to work extremely hard and find different ways and different methods."