The couple had tied the knot in 2012, while their daughter was born in 2015- months after the cricketer announced his retirement.
According to reports, Clarke and Kyly separated five months ago.
Kyly Boldly will continue to live in their Vaucluse property with their daughter.
In a statement released to The Australian on Wednesday night, the couple revealed they had split up after "living apart for some time".
Photo Credit: Getty Images."After living apart for some time, we have made the hard decision to separate as a couple, amicably".
The divorce is reportedly worth approximately $40m. Both further said, "With great respect for each other, we have come to the result together that it will be better for us while keeping us fully responsible for our child as parents".
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In a joint statement issued on Wednesday, the two said, "After being separated for a few days, we have taken a hard decision to stay apart as a couple".
"We'd like to acknowledge the wonderful support we've had from family and friends, and at this time request privacy so that we can manage this next stage of our lives", the statement said.
Michael Clarke and wife Kyly celebrated daughter Kelsey Lee's fourth birthday in November.
As for cricket, Clarke played 115 Tests between 2004 and 2015 and scored 8643 runs at an average of 49.10, including 28 centuries.
Australia additionally gained the 2015 World Cup underneath Clarke's captaincy. The decision is also surprising because it comes only a year after Kyly admitted that her relationship and marriage with Clarke was going strong.
Clarke had previously been engaged to model Lara Bingle before the two separated in 2010. Clarke made his global debut in 2004 against India.