The defender feels that the situation has become potentially a source of division within the Three Lions squad and has made his position "untenable".
Bridge has released a statement from his lawyers confirming his withdrawal.
"I have thought long and hard about my position in the England football team in the light of the reporting and events over the last few weeks," the statement reads.
"It has always been an honour to play for England. However, after careful thought I believe my position in the squad is now untenable and potentially divisive.
"Sadly therefore I feel for the sake of the team and in order to avoid what will be inevitable distractions, I have decided not to put myself forward for selection.
"I have today informed the management of this decision. I wish the team all the very best in South Africa."
The news follows hard on the heels this morning of the revelation that Rio Ferdinand's back problem will keep him out of next week's Three Lions friendly with Egypt.
With Terry's club-mate Ashley Cole also out for the rest of the season with a fractured leg, England boss Fabo Capello now faces something of a dilemma when it comes to the left side of England's defence.