Rothstein was appointed to the court by Prime Minister Stephen Harper in March 2006 after 13 years with the Federal Court and the Federal Court of Appeal.
Chief Justice Beverley McLachlin has formally notified Justice Minister Peter MacKay of the coming vacancy on the bench.
Although Rothstein steps down at the end of August, the Judges Act provides that for six months after retirement, he can continue to participate in judgments of cases heard before his departure.
Rothstein was Harper's first appointment to the highest court, shortly after the Conservative government took office.
Harper has appointed all but two of the nine judges on the court.
McLachlin said Rothstein will be greatly missed.
"Justice Rothstein has served on the court with distinction, and made enormous contributions to the court and to Canada," she said in a statement.
The prime minister thanked Rothstein for his distinguished service over the years.
Rothstein pointed out that on retirement, he will have been a judge for more than 23 years.
"I am grateful for this privilege and mindful of the honour and public trust that attach to the holding of judicial office in Canada," he said in a statement.
Rothstein was born and raised in Winnipeg. He earned a commerce degree and a law degree at the University of Manitoba and began in private practice in 1966.
During his career, he taught law at the University of Manitoba and was a member of the Canadian Human Rights Tribunal from 1986 to 1992.
He was appointed to the Federal Court in 1992 and moved to the Federal Court of Appeal in 1999.
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