Defoe, who re-joined the Black Cats in February, scored 304 goals in 762 career club games and added 20 goals in 57 England appearances.
He also spent time at Portsmouth, Bournemouth and Major League Soccer club Toronto during his 22-year career.
Defoe said; “It’s been a really tough decision.
“I made my professional debut at 17-years-old in 1999, and I feel now is the right time to bow out.”
Diminutive forward Defoe scored 162 Premier League goals, making him the ninth highest scorer in the league since its formation in 1992-93.
He is also 15th in the appearances list, having played 496 games in England’s top flight.
Defoe’s Sunderland return was marked by a late night social media unveiling on January’s deadline day, in which the veteran striker described the return as “special for many reasons”.
However, he failed the reach the heights of his first spell, making just seven appearances – of which just two were starts – and failing to score for the League One promotion-chasers.
While a prominent international, to many non-football fans Defoe will be best known for his friendship with terminally ill Sunderland fan Bradley Lowery, who died in 2017, aged six, after a long cancer illness.
Jermain Defoe’s became close with Sunderland fan Bradley Lowery as he battled neuroblastoma
His work through the Jermain Defoe Foundation also brought him an OBE in 2018 for services to charity.
Defoe said; “Football will always remain in my blood and it gives me great pride and satisfaction to look back on the blessed career I’ve had.
“I now look forward to spending some quality time with my friends and family before moving forward on this next chapter in my career.”
He thanked fans, coaches, team-mates and staff at all his clubs for “playing such an integral part” in his career, while also paying tribute to those closest to him.
“Lastly I want to say thank you to my mum, you gave me a ball at two years old and made me believe my dream could happen,” Defoe added.
Defoe’s career timeline
Signed by West Ham from Charlton as a 16-year-old in 1999 for a compensation fee of £1m-plus
Went on loan to Bournemouth in Division Two in 2000-01 and scored 10 goals in 10 games to equal a club record
Established himself in the West Ham team under Harry Redknapp, going on to score 40 goals in 104 games before joining Tottenham for £7m in 2004
Made England debut against Sweden in March 2004, as a substitute for Darius Vassell
Became a crowd favourite at White Hart Lane in his first spell, netting 64 goals in 177 matches
Returned to the south coast with Portsmouth in 2008, missed out on the FA Cup final as a cup-tied player, but scored in Pompey’s first European appearance
Rejoined Spurs a year after his exit, helping them to a League Cup final before missing out on the showpiece through injury
Equalled record for most goals in a Premier League game with five against Wigan, and became Spurs’ sixth highest all-time goalscorer and the club’s most prolific scorer in Europe
Joined MLS side Toronto in 2014 but returned to the Premier League with Sunderland, scoring a Tyne-Wear derby winner against Newcastle and twice helping the Black Cats escape relegation
Moved to the Scottish Premiership with Rangers in 2019 on an initial loan deal, winning his first league title with the Gers in 2020-21.
Tottenham and England ex Striker Jermaine Defoe retires