The 35-year-old, who started the World Cup final win over Croatia in Russia four years ago, had been omitted from Inter Miami’s squad for this season.
Midfielder Matuidi won Ligue 1 with Paris Saint-Germain and Serie A with Juventus after spending time with Saint-Etienne and Toulouse.
He made 84 international appearances, scoring nine times before his final Les Bleus game in 2019.
“I’ve decided to end my career as a professional footballer,” he said in a video on YouTube.
“I had the chance to play for the biggest European clubs, wear the France shirt, give my family a buzz, live my passion and they are images that will stay with me,” he added.
He is the first member of France’s 2018 squad to retire.
“My head, my heart, tell me to stop and to think about those close to me, my wife, my children, and this life I built,” he said.
“I think I’ve come to the end of what I’m able to bring to the table.”
Matuidi was present last Sunday as France lost in the final of this year’s World Cup to Argentina in Qatar.