"It's my decision and it's final," the France and Real Madrid playmaker told French television channel Canal+.
The 33-year-old, who led France to victory in the 1998 World Cup and Euro 2000, had hinted recently he was ready to quit.
Zidane became the world's most expensive footballer when Real signed him from Juventus for $66 million in 2001 and he scored a superb winner to earn Real their ninth European Cup in the 2002 final against Bayer Leverkusen.
But injuries and inconsistency have dogged him over the last two seasons and, although he still has another year left on his contract with Real, he decided to call it a day.
"I have to listen to my body and I cannot carry on for another year," said Zidane, who cited Real's poor results as one of the reasons for his decision.
"I think it is better to clarify the situation now," he added.
Zidane had been expected to announce his decision at a news conference called for Wednesday in Madrid.
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