Oosthuizen, 44, joined LIV Golf in 2022 and served as captain of the all-South African team Southern Guards GC.
"Five years ago, I made one of the best decisions of my life, moving away from the traditional golf world and into something very special with LIV Golf and Southern Guards GC," Oosthuizen posted Wednesday on X.
"I'm the biggest supporter of team golf and always will be. Golf needs more of it."
Southern Guards consisted of Oosthuizen, Charl Schwartzel, Branden Grace and Dean Burmester.
"Southern Guards is my team. It always has been and it always will be. That's what makes this so difficult," Oosthuizen said.
The team returned the love on social media.
"Thank you for the memories, Cappie," Southern Guards wrote on X. "For your leadership, the laughs and the moments we'll never forget! It's been a privilege to share this chapter with you. All the best in your future endeavors. You'll always be part of the team. Go Rhinos."
Oosthuizen said a more flexible playing schedule will go a long way toward allowing him to compete at a high level.
"I realized I have a lot more in me, and my biggest fear was that the schedule on LIV 2.0 would be tough to manage," he said. "I feel I have a few more years of good, competitive golf left in me, and the only way to be really sharp and competitive is through a schedule I control."
Oosthuizen won the 2010 Open Championship in St. Andrews, Scotland, and has finished as a runner-up at least once in each of the other three majors. He has 11 victories on the DP World Tour.
LIV Golf filed for Chapter 11 bankruptcy protection on Sept. 8. The league is hoping to launch LIV Golf 2.0 in 2027.
Oosthuizen's departure is the latest loss from the league's talent pool.
Last week, Spanish superstar and three-time LIV Golf individual season champion Jon Rahm reached a separation agreement with LIV Golf and Belgium's Thomas Pieters announced plans to play on the DP World Tour.
They join other notable names who are not returning to LIV Golf as it attempts to restructure without financing from Saudi Arabia's Public Investment Fund.
That list also includes Sergio Garcia, Abraham Ancer, David Puig and Adrian Meronk.
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