The move comes after Rayudu was snubbed by the Indian team management who preferred Mayank Agarwal as replacement for the injured Vijay Shankar in the World Cup squad.
Rayudu was in the stand-by list for the World Cup but even after injuries to Shikhar Dhawan and Shankar, he failed to board the flight as the selectors and the team management picked Rishabh Pant and Agarwal as replacements.
After he was ignored in the 15-member World Cup squad, Rayudu posted a cheeky tweet that was directed to the selectors.
In 55 ODIs, Rayudu scored 1694 runs with three centuries and 10 half-centuries at an average of 47.05. In the six T20Is he played, the middle-order batsman scored 42 runs. Rayudu never got a chance to represent India in Test cricket.
Rayudu, who made his ODI debut against Zimbabwe in 2013 played his last ODI against Australia in Ranchi this year.
Last year, Rayudu announced his retirement from first-class cricket to focus on one-dayers and T20s. Rayudu called time on his 17-year-long first-class career in which he scored 6151 runs from 97 games.
"This is to inform that Ambati Rayudu, Hyderabad captain and member of the India ODI team, has decided to retire from longer version of the game including Ranji Trophy (multi day) to focus on limited overs cricket and T20 cricket," Hyderabad Cricket Association (HCA) had stated.
Rayudu made a comeback in the Indian team by virtue of a successful IPL for Chennai Super Kings and was seen as India's number four batsman going into the World Cup. However, despite being named in the list of reserve players for the World Cup, Rayudu was given a cold shoulder.
It was the longer format where a 16-year-old Rayudu initially made his mark in the Ranji Trophy for Hyderabad before a tiff with erstwhile HCA boss Shivlal Yadav's son Arjun made him shift to Andhra.
He did comeback before joining the rebel Indian Cricket League and was banned by the BCCI. He then got amnesty and was back in Hyderabad.
Later, he shifted to Baroda where he played for number of seasons and also made his senior international debut during that period.