The 34-year-old made a rare appearance in a first-class fixture for Western Australia against Victoria last week, scoring 4 and 9 while he did not bowl.
Marsh said in a statement released by his domestic side: "It has been an honour to play Sheffield Shield cricket for WA.
"Right now I am deeply committed to the group and the (Perth) Scorchers. Playing for WA has been a huge part of my life and I plan to give back in any way possible long into the future."
The final part of the statement said: "The Australian white-ball captain remains open to the prospect of playing Test cricket."
In the Sheffield Shield for Western Australia, Marsh has scored 2744 runs at 29.50 and claimed 82 wickets at 29.48.
"Mitch embodies everything about what it means to be a Sheffield Shield player for Western Australia," Western Australia head coach Adam Voges said.
"From playing alongside him to coaching him in more recent times, he's given his all for his state.
"It's been a privilege to watch him progress from Sheffield Shield to being a very successful player at international level for Australia.
"He's an outstanding character on and off the field and it's been a pleasure to play a part in his journey."
Australia captain Pat Cummins will feature for the first time in the Ashes after being included for the third Test in Adelaide, while spinner Nathan Lyon also returns to the XI.
Australia batter Usman Khawaja says he is over his back injury and "ready to go" ahead of the third Ashes Test against England that starts in Adelaide in 17 December.
Australia wicketkeeper Alex Carey insists the hosts have not entertained any ideas of an Ashes clean sweep, reminding his side of the drawn series in England last time out.
Pat Cummins is expected to return to Australia's team for the third Test against England in Adelaide but fellow paceman Josh Hazlewood has been ruled out of the Ashes.
