The Black Cats confirmed on Wednesday evening that the 67-year-old, who was drafted in in March for just nine games in which he was able to secure the club's Barclays Premier League status, would not be returning to Wearside.
Chairman Ellis Short said: "Although I am extremely disappointed, I understand and absolutely respect his decision. In his brief time here, he made a real impact and lifted the club with his experience and enthusiasm. We will always be grateful to him for what he achieved."
Advocaat revealed he had received several offers of employment, but while admitting Sunderland was the only one he would have considered, decided to end his career in club football.
The Dutchman said: "At certain moments in your life, you have to make a decision and I am almost 68 years old now. A number of clubs contacted me, but the decision was always Sunderland or nobody.
"I would like to thank the Chairman, [sporting director] Lee [Congerton], the staff and of course the fans. We gave everything in our time there and achieved what we set out to. Sunderland has been one of the highlights of my career."