Henry, 37, ended his four-and-a-half-year stay with MLS club New York Red Bulls earlier this month ahead of his contract expiry at the end of the year.
The former France international, who won the 1998 World Cup and Euro 2000 as he amassed 123 international caps, was linked with an emotional return to Arsenal.
But Henry - Arsenal's all-time leading goalscorer with 226 goals - has decided to call time on his career, making the announcement via his official Facebook page.
Henry will work as a pundit for Sky Sports next year.
"After 20 years in the game I have decided to retire from professional football," Henry wrote.
"It has been an incredible journey and I would like to thank all the fans, team mates and individuals involved with AS Monaco, Juventus, Arsenal FC, FC Barcelona, the New York Red Bulls and of course the French National Team that have made my time in the game so special.
"It is now time for a different career path and I am pleased to say that I will be returning to London and joining Sky Sports.
"I will hopefully share some of the insights, observations and experiences I have learnt over the years with you guys.
"I have had some amazing memories [mostly good!] and an wonderful experience. I hope you have enjoyed watching as much as I have enjoyed taking part.
"See you on the other side..."
Henry enjoyed a trophy-laden career, winning titles in three different countries.
After lifting the Ligue 1 title with Monaco in 1996-97, Henry went on to claim two Premier League titles, three FA Cups as well as two Community Shields during his Arsenal spell.
Ha also clinched two La Liga crowns and the 2008-09 UEFA Champions League among others as a Barcelona player.
