During his 41 years association, Starbucks grew from a small company selling only whole beans to a global coffeehouse chain with more than 36,000 stores in 86 markets.
Schultz stepped down as CEO in March after he took the reigns at the company for the third time amid a surge in union organizing at U.S. cafes for better pay and benefits.
Schultz, 70, in March defended himself and the coffee chain against allegations of "union busting" at a U.S. Senate committee hearing.
Reckitt Benckiser's former CEO Laxman Narasimhan, who took over as chief executive at Starbucks after Schultz's latest stint, is now tasked with handling the labor unrest and wavering demand.
Schultz will become lifelong chairman emeritus following the retirement.
"I look forward to supporting this next generation of leaders to steward Starbucks into the future as a customer, supporter and advocate in my role as chairman emeritus," Schultz said.
Meanwhile, the company announced the election of Wei Zhang as the ninth director on its board, effective Oct. 1. Zhang was most recently senior adviser to the Alibaba Group, and formerly led Alibaba Pictures Group.
Other members on the board include Microsoft (MSFT.O) CEO Satya Nadella and former Domino's Pizza (DPZ.N) boss Richard Allison.
Shares of Starbucks were down marginally in extended trading.
