Rice, 42, made his decision over the weekend at home in San Francisco, then returned to Broncos headquarters and met with coach Mike Shanahan. He played 20 NFL seasons.
"This is a happy day," he said. "I think the tears that you see basically is that I have really enjoyed this ride.
"I'm done. I'm looking forward to the next phase of my life."
Shanahan confirmed what Rice already knew — that he would be a fourth or fifth receiver, at best this season — and Rice confirmed what many figured — that he would rather call it quits than be a bit player with the Broncos.
Rice signed with Denver over the summer, reuniting with Shanahan, who was his offensive coordinator in the 1990s in San Francisco. For Rice, the idea was to play for a coach who was familiar with him and for a team that could help him go out a winner.
Shanahan made it clear he would not promise Rice anything, not even a roster spot. Behind the scenes, though, Shanahan said he knew it would never come down to him having to cut the league's best all-time receiver: He figured if Rice knew it was time to go, he would step aside himself.
"I've pushed this body for 20 years," Rice said. "I was never a coach potato, I was always working out. I had to prove myself every year.
"A lot of guys here were 3 when I started playing. I think those guys are pretty much amazed that I can still run the way I can run."