Parker made a return from injury to figure on the bench in Wales's RBS Six Nations crowning match against Ireland last season and was also instrumental in his adopted country's victory over Australia last autumn.
"We are incredibly disappointed that Sonny has decided to step down from the international stage and made every effort to disuade him from doing so," said Ruddock. "We would have picked him in this year's squad as we prepare to defend the Championship title, but we have to respect his decision when he says that he can no longer give the commitment required for rugby at this level.
"He has already done a great service for both club and country in the seven years he has been in Wales, for Pontypridd, the Celtic Warriors, the Ospreys and at international level and we wish him all the best in the future."
28-year-old Parker began his rugby career in Europe after leaving his native New Zealand for Italy and Viadanna as a 19 year-old. By the time he was 21 he was a regular for Pontypridd and, now at the Ospreys, he plans to remain in Wales for the foreseeable future.
"This is one of the biggest decisions a player will ever make, but it is just something I have to do," said Parker. "I've come to the stage in my career where I only have around three seasons left to play rugby and I want to concentrate on the career I will have when I stop playing whilst giving all I can to the Ospreys.
"I just don't feel I have my head in the right place at international level anymore and, it's a wrench, but the time is right for me to hang up my Wales boots. The most difficult thing is leaving the boys behind, some of the old Ponty boys for example have been like brothers to me - but I know that there are a lot of great players in the squad, especially in the centre with Hal (Luscombe), Matthew (Watkins) and (Ceri) Sweeney, all excellent players who can really gel together.
"The reason we did so well last year was that there is a real team ethic with forwards and backs interchanging, with all the skills a rugby player should have and the kind of open game that can really spark into life when you get the right combinations. They have a really good chance of doing something special again this year and I want to wish the players and the Welsh team management the best of luck.
"It's been the hardest decision of my life, playing for your country is the pinnacle of any rugby player's career, but all I will do now is concentrate on playing for the Ospreys. I have some management courses I need to get under my belt, I've always said I will run my own restaurant one day and my girlfriend and I are staying in Wales for the foreseeable future."
The Ospreys regional rugby manager Derwyn Jones added: "Sonny has already committed his long term future to the Ospreys, we have always encouraged him to play rugby at the highest level and have taken great pleasure from his performances for Wales over past seasons. This is a very personal decision and we support Sonny whole-heartedly."
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Sonny Parker, who was born in Thames, New Zealand, scored a try in each of his three 2003 Rugby World Cup appearances, against Canada, Italy and, ironically, the All Blacks. He qualified to represent Wales under the three-year residency ruling.
Parker moved to Northland as a teenager and played his first senior club game for Auckland Marist, joining future All Blacks Xavier Rush and Dylan Mika. He played representative rugby for New Zealand Secondary Schools and made the Auckland B squad before a broken leg forced him to rethink his career path.
He joined Italian club Viadana for the 1998-1999 season before being brought to Wales by then-national coach Graham Henry and linking up with Pontypridd. He is studying sports science at Glamorgan University.