Ferguson, who has not played for Scotland since the infamous 'Boozegate' episode last year, admitted earlier this month that being out of the squad "hurt" him.
But he has since told Scotland manager Craig Levein that he does not want to be considered for selection.
A Scottish Football Association spokesman said: "During a live radio broadcast last week, Barry Ferguson intimated that he may consider a return to international football.
"In subsequent conversations with the national team coach, Craig Levein, and the team scout, Michael Oliver, Barry has confirmed this not to be the case.
"He will therefore not be considered for selection and the matter is now closed."
Levein has been eager to welcome the Birmingham midfielder back in the fold since becoming George Burley's successor in December last year.
Allan McGregor, who had been banned indefinitely by the Scottish Football Association along with Ferguson, quickly returned to the squad when Levein reopened the door to the pair.
But Ferguson's personal circumstances had changed after leaving Rangers as a consequence of his drinking session at the Scotland hotel and subsequent gestures towards photographers after being dropped for a World Cup qualifier against Iceland in April 2009.
The 32-year-old visits his Lanarkshire-based family during international breaks and also feels a debt of gratitude to Birmingham boss Alex McLeish.
McLeish was the only Barclays Premier League manager to show an interest in Ferguson after Rangers decided to let him go and the former Scotland captain has returned to top form at St Andrew's.
Ferguson laid bare the inner turmoil over his continuing international exile on BBC Radio Scotland earlier this month in an interview seen by many as the first step towards a return.
But Ferguson also admitted that, had he returned to the national team, McLeish would not have offered him the contract extension that he recently signed, which ties him to Birmingham until the summer of 2012.
The former Scotland manager has consistently warned Ferguson that he might find it difficult to retain his place in the team after international breaks were he to resume playing for his country.
Ferguson said on September 15: "It never leaves you and you always want to represent your country.
"Watching the games, you want to be out there helping Scotland get to a major European finals. It does hurt not being part of it."
Levein then reiterated his desire to have Ferguson back and McLeish declared the decision was up to his player.
But the former Rangers manager added: "Scotland have got two hard games coming up with the Czech Republic and Spain and I know Barry would excel in the company of those two teams.
"But then he would have to come back and play away at the Emirates, so it's a big ask for a player of 32 years of age."
Whether Levein held out genuine hope of a Ferguson return is unclear, but there is no question his addition would have solved a major selection problem in midfield.
Lee McCulloch was booked in both the goalless draw in Lithuania and the last-gasp victory over Liechtenstein and will consequently miss Scotland's third European Championship qualifier in Prague on October 8.
His most likely replacement in the holding role is Paul Hartley, but Aberdeen manager Mark McGhee has ruled him out because of a hamstring injury.
Kevin Thomson has yet to play for Middlesbrough since breaking his leg in August, although the former Rangers midfielder has returned to training earlier than anticipated.
Levein is due to name his squad on Thursday for the games against the Czechs and Spain, who visit Hampden on October 12.
Ferguson's brother, Derek, revealed the Birmingham midfielder had been seriously considering a return until the weekend.
The former Rangers and Sunderland midfielder, who spoke to his younger brother today, told BBC Radio Scotland: "I was confident he was going to come back but, if he isn't 100% right mentally, he has made a wise decision.
"You don't want to be part of something if you're not fully committed.
"There are some things that are niggling away at the back of his mind.
"I think he was a bit worried about the media circus that would probably surround him. It might even take away from the game.
"He is enjoying the quiet life down there. He's away from the goldfish bowl up here.
"I can see it in him physically, he is looking better. He's a happier man, he is not in the spotlight."
Derek added: "There are two or three things that influenced him. The other one is probably Alex McLeish. Alex McLeish has a big influence on Barry.
"Alex McLeish has got to look after himself and Birmingham. Because he's the wrong side of 30, if he goes away and plays international matches, is he going to be fresh for Birmingham?
"Alex McLeish has not said: 'You're not going to play for your country'.
"He is just putting his case forward and saying: 'Are you going to be able to play these games after international breaks?"