A Somali pirate commander, nicknamed 'Big Mouth,' has announced his retirement at a ceremony in the central town of Adabo.

Mohamed Abdi Hassan, who is said to have generated millions of dollars in ransom from seized ships in the Indian Ocean, did not give a reason why he was quitting.

"We have been involved in this dirty business for a long time, but we tasted the bitterness and bad consequences of this job. I and another comrade have to quit," he told reporters on Wednesday.

"We have been in negotiations with the former government, with Sheikh Sharif Sheikh Ahmed (former Somali president), regarding the way we can easily get rid of this dirty business."

Other men said to be giving up piracy also attended the ceremony.

"I would also like to encourage many of my colleagues to renounce piracy too, and hand over whatever materials they have, boats and weapons," said Mohamed Abdi Hassan.

"Some of them as you can see have already expressed their retirement, and I hope others who are still in the business will follow the footsteps of their brothers."

Hijackings by Somali pirates have significantly decreased in the last couple of years, because many ships now carry armed guards and there is an international naval armada that carries out onshore raids.

In 2010, pirates seized 47 vessels.

As of late December, they had taken five in 2012, a decrease that could signify that the scourge is ending, though experts say it is too early to declare victory.