The 43-year-old made 682 appearances for boyhood club Hearts, Cowdenbeath, Sunderland and Celtic and won 84 caps for Scotland.
"I've never wanted it to end, but end it must. I have lived my dreams and for that I am so thankful," Gordon said in a video announcing his decision on social media.
He was part of Scotland's squad for the 2026 World Cup and was the oldest player at the tournament, although he did not play in any matches, acting as backup to Angus Gunn.
A product of the Hearts' youth academy, Gordon made his senior debut while on loan at Cowdenbeath in 2001 before breaking into Hearts' first team the following season.
In 2007, he joined Premier League side Sunderland for a reported 9 million pounds ($12.16 million), a British record fee for a goalkeeper at the time. Injuries hampered his spell at the Stadium of Light, as he made 95 appearances over five years.
Gordon returned to Scotland with Celtic in 2014. During six trophy-laden seasons in Glasgow, he won five Scottish Premiership titles, two Scottish Cups and five League Cups before rejoining Hearts in 2020.