No, she is 100 % retiring. She didn't file a candidacy in her own district.
Probably a stupid question but just in general, does the Chancellor have to be a member of the Bundestag (like in Britain, where ministers have to be MPs or Lords), or is that just a constitutional convention?
They don't have to be (in some states such as NRW that's the case. Ironically in 2017 Laschet almost failed to win his district - That could've prevented him from becoming Governor in theory, but I guess another Landtag Member would've just resigned so he could assume the office...).
Still, as far as I know, every single Chancellor has also been a Bundestag member. The fact that she doesn't run for reelection in her district just underlines that she is serious with retiring this year.
Ministers don't have to be Members of Bundestag either, and it happens relatively frequently that non-members of Bundestag get appointed to the Cabinet. In Merkel's 3rd Cabinet, Johanna Wanka (Education) and Heiko Maas (Justice) were such cases, in the current Cabinet Horst Seehofer (Interior), Olaf Scholz (Finances) and AKK (Defence).