The 32-year-old striker made more than 200 appearances in the Premier League during spells with the Black Cats, Leeds and Newcastle, on loan.
Bridges moved to the Newcastle Jets in 2009 and scored six goals in 15 appearances during his first season in Australia.
Top cat: Michael Bridges (front) began his career with Sunderland
He became the club's first overseas-born captain at the start of the 2010-11 campaign, but has since been hampered by a knee injury.
Bridges will stay on with the A-League side as their international football and business development manager.
'After great consideration it was a difficult to decision to make,' the former England Under-21 international said.
Promise: Bridges quickly established himself at Leeds before injury struck
'However the opportunity to enter the next phase of my life is one that is too exciting not to take now whilst it is being offered.'
North Shields-born Bridges is considered one of the of the Premier League's great unfulfilled talents, as injury prevented him reaching his best.
Having made a multi-million pound move from Sunderland to Leeds in 1999, Bridges scored 19 goals for United in his first season.
Familiar story: Bridges never reached his full potential after an achilles injury
However, a serious Achilles injury the following year seriously hampered his ability and he failed to score again for Leeds in four more seasons before leaving.
As well as Newcastle, he also had spells in the UK at Bolton, Carlisle, Hull and MK Dons.
Former Sunderland striker Michael Bridges Jets in to sign for NewcastleSydney Bridges: Michael enjoys the good life in Oz after all the injuries
Explore more:People: Michael Bridges Places: Newcastle, Leeds, United Kingdom, Australia