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Johns' manager John Fordham said the halfback, arguably the world's best rugby league player, informed him today of his decision.
"There has been a lot of speculation about Andrew playing rugby union for some time now but the subject came to a head yesterday when the NSW Rugby Union went public about wanting to approach him about changing codes," Fordham said in a statement.
"With the interest this has created, it really forced Andrew's hand into making a decision regarding rugby union.
"As a result, he considered it important to promptly address the situation so that it didn't become a long-running media issue.
"He also realised that he needs, at this stage, to narrow his future options.
"The result was his advice to me this morning that he wants to remain a rugby league player."
Johns, the Newcastle captain, suffered a season-ending knee injury in the early rounds of the NRL, making it the third season in a row he has failed to finish because of injury.
Australian rugby union team coach Eddie Jones has long been a fan of Johns, who was seen as a possible five-eighth in the 15-man code.
However, the Wallabies are well-served for five-eighths with Stephen Larkham, Elton Flatley and Matt Giteau all accomplished players.
The Waratahs saw Johns as their potential saviour in the crucial position, which has always been their weak link in the Super 12, but they would need a financial top up from the ARU to afford Johns.
The NSWRU was to have met with the Australian Rugby Union today to discuss the possibility of luring Johns to the code.
Fordham said Johns appreciated the interest of the Waratahs.
"Andrew recognises that he will soon need to make a decision on his football future," he said.
"That's why his focus in coming weeks will be devoted solely to rugby league."