Schultz, 64, became director of operations and marketing at Starbucks in 1982.
Schultz stepped down from his former position as CEO in April, but had stayed on as the company's executive chairman.
Schultz's departure comes a week after the company closed more than 8,000 U.S. stores to provide racial bias awareness training to around 175,000 employees.
Schultz said he had initially meant to announce his retirement last month, but put it on hold after two black men were arrested while sitting in a Philadelphia Starbucks in April. He had endorsed Democratic presidential nominee Hillary Clinton before the last presidential election and had sometimes deflected questions about whether he would run for office.
"I want to be truthful with you without creating more speculative headlines", Schultz, said in an interview with The New York Times.
WWDC 2018: Here's what to expect from the big Apple event today
This implies that developers will have access to a lot of features after the 2018 WWDC , with more changes coming in iOS 12 . There are various reports , including one from Bloomberg , saying that this year's WWDC will be "hardware-less".
Schultz elevated the concept of Starbucks as the third place between home and work: a comfortable, welcoming environment that provides uplifting experiences, community and human connection.
Schultz said Monday that Kevin Johnson "is a true servant leader" who will lead the company into the future.
"I told myself a long time ago that if I was ever going to explore a second act, I couldn't do it while still at the company", he added.
"He is also writing a book about Starbucks social impact work and the efforts to redefine the role and responsibility of a public company in an ever-changing society", it said. Shares of Starbucks have risen 21,000 percent since the company's initial public offering in 1992; an investor who had put in $10,000 then would have more than $2 million today.
Schultz's departure came weeks after Starbucks revamped its store policies following the arrests of two customers at a Philadelphia store location.
Starbucks' board named Myron Ullman, who was previously chairman and CEO of struggling retailer J.C. Penney, as its new chair and Mellody Hobson vice chair effective upon Schultz's retirement.