There still is an unmet need for a safe and sustained intravitreal drug delivery system. In this study we are proposing and characterizing a micelle based, clear-media intravitreal drug delivery system using the lipid derivatized nucleoside analog, hexadecyloxypropyl-cidofovir (HDP-CDV, CMX 001). HDP-CDV forms micelles in water and in vitreous supernatant with the critical micelle concentration of 19 μg/mL and 9 μg/mL, respectively at 37 °C. The formed micelles had the average size of 274.7 nm and the Zeta potential of −47.1 mV. Drug release study in the excised rabbit vitreous showed a sustained release profile with a half-life of 2.7 days. The micelle formulation of HDP-CDV demonstrated a good safety profile in two animal species (rabbit and guinea pig) following intravitreal injection. The sustained efficacy was tested in a pretreatment study design and the drug potency was tested in an ongoing herpes simplex virus (HSV-1) retinitis model. The pretreatment studies using single intravitreal injection and later HSV-1 infection revealed at least 9 weeks of vitreous presence and therapeutic level of HDP-CDV, with 71% eyes protection from infection. The treatment study demonstrated that intravitreal administration halted active HSV-1 retinitis in 80% of the infected eyes while cidofovir (CDV) treatment failed to suppress active HSV-1 retinitis. In summary, lipid derivatized nucleoside analogs can be formulated as a micelle intravitreal injection and provides a sustained drug release in vitreous for chronic retinal diseases.