The 31-year-old Dane scored 14 goals in 232 appearances for the Reds from 2006 to 2014 and won 75 caps for his country.
He signed for Liverpool from Brondby by Rafael Benitez for £6,000,000, making him the most expensive footballer sold by a Danish club to a foreign club, and returned eight years later for £3,000,000 after declaring that Brendan Rodgers was 'unappreciative' of his efforts.
"It's been a tough decision but I am pulling the plug," he announced.
"It has been difficult in recent years. The last two-three years I think I've been at an acceptable level. But acceptable is not good enough for me.
"I don't want my level to fall any further and so it was time to stop."
Thank you for your support.A great experience.It's sad,but it is the right decision to stop. I'm proud of my career. pic.twitter.com/Geu9y47vnN
— Daniel Agger (@DanielAgger) June 9, 2016