The ex-England international, who scored 32 goals in 74 appearances during his four-year stay in Glasgow, helped Rangers wrestle back the Scottish Premiership title last season.
The 39-year-old joined English League One outfit Sunderland for a second spell in January but has now decided to hang up the boots.
Posting an emotional message on his official Twitter page, Defoe thanked all of his former team-mates, coaches, fans and family members for their support throughout his career.
He wrote: “After 22 years in the game, I have decided to retire from professional football.
“It’s been a really tough decision, and one I have discussed with my family and those closest to me.
“I made my professional debut at 17 years old in 1999, and I feel now is the right time to bow out. I have had an incredible journey, and have met some amazing people in the game.
“Football will always remain in my blood, and it gives me great pride and satisfaction to look back on the blessed career that 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.
“Thank you to all the fans from each club I’ve played for. The love I have received and endured throughout my career will never be forgotten and I will always have a special bond with you all.
“Thank you also to my amazing team mates, coaches and staff for playing such an integral part in my career.
“Lastly I want to say thankyou to my mum. You gave me a ball at two years old and you made me believe my dream could happen. All that I am is because of you and I owe everything to you and God.”
Prior to joining Rangers in January 2019, initially on loan, Defoe starred for West Ham, Tottenham Hotspur, Portsmouth, Toronto and AFC Bournemouth.
He earned 57 international caps, netting 20 goals to round off a glittering career.
GlasgowWorld takes a detailed look at Defoe’s highlights during his time at Rangers:
1. TWO ASSISTS VS COWDENBEATH
Defoe congratulates striker partner Kyle Lafferty after providing two assists in a 3-1 win against Cowdenbeath in the Scottish Cup Fourth Round on route to the quarter-finals Photo: Ian MacNicol - Getty Images
2. OPENING GOAL VS HEARTS
Defoe celebrates after scoring Rangers’ opener against Hearts to end a five-game winless run in April 2019 Photo: SNS Group
3. FIRST RANGERS HAT-TRICK VS HAMILTON
James Tavernier hugs Defoe after completing his first hat-trick for the club in an 8-0 thrashing of Hamilton Accies Photo: Alan Harvey - SNS Group
4. MEMORABLE HAT-TRICK VS HIBERNIAN
Defoe scored a ‘perfect treble’ against Hibernian during arguably his best season at the club Photo: SNS Group