The 27-year-old has won 51-caps for Australia and played in all four matches during their autumn tour of Europe.
The versatile back has missed just four of the 43 Tests played by Australia since the start of 2008, last year becoming the 35th Australian to play 50 Test matches when he face Italy in Florence.
Ashley-Cooper could face the Lions when they go down under in 2013 and would be one of the most experienced Wallabies at that time should it happen.
He had been the subject of intense speculation in recent months but the move is believed to be motivated by the desire to be closer to family on the Central Coast and in Sydney.
Fellow Wallabies star and Brumbies skipper Matt Giteau had earlier revealed the news via Twitter.
"Well done @AdamCoopy on ur decision!" [sic] read Giteau's tweet.
"I knew u were going especially wen I gave u a coffee this morning and u said 'tah' instead of thanks." [sic]