"I know I can still play, but it's like I told my wife, I'm just tired mentally. I'm just tired," Favre told ESPN's Chris Mortensen in a voice mail message.
Tuesday's surprise move comes after the 38-year-old three-time MVP set several league records, including most career touchdown passes, in one of his most successful seasons.
Favre's agent, Bus Cook, said the quarterback told him of his decision Monday night.
"Nobody pushed Brett Favre out the door, but then nobody encouraged him not to go out that door, either," Cook said by phone from his Hattiesburg, Miss., office.
Packers general manager Ted Thompson thanked Favre for 16 years of wonderful memories with the team.
"He has had one of the greatest careers in the history of the National Football League, and he is able to walk away from the game on his own terms - not many players are able to do that," Thompson said in a statement.
Favre led the Packers to the NFC championship game in January, but his interception in overtime set up the New York Giants' winning field goal.
"If I felt like coming back - and Deanna (Favre's wife) and I talked about this - the only way for me to be successful would be to win a Super Bowl," Favre told ESPN. "To go to the Super Bowl and lose, would almost be worse than anything else. Anything less than a Super Bowl win would be unsuccessful."
The news was a surprise to teammates.
"I just saw it come across the TV," Packers wide receiver Koren Robinson said, when reached on his cell phone by The Associated Press.
Much of Favre's legacy will be defined by what happened off the field - and how he reacted to it, CBS News correspondent Jeff Glor reports.
In 1996, he was addicted to painkillers and in 1999 to alcohol, which almost ruined his marriage, Glor reports. He dropped both the drugs and the booze, and along the way started the Brett Favre Fourward Foundation for disabled and disadvantaged kids.
And after his wife battled breast cancer, the couple formed another foundation to fight that disease.
He retires with 5,377 career completions in 8,758 attempts for 61,655 yards, 442 touchdowns and 288 interceptions.
In his final season, Favre also extended his quarterback-record streak of consecutive regular-season starts to 253 games - illustrating his trademark toughness. Add the playoffs, and Favre's streak stands at 275.
In the past several offseasons, Favre's indecision about his football future became a winter tradition in Wisconsin, with Cheeseheads hanging on his every word.
Unlike after the 2006 season - when Favre choked up in a television interview as he walked off the field in Chicago, only to return once again - nearly everyone assumed he would be back next season.
It was a remarkable turnaround from 2005, Favre's final season under former head coach Mike Sherman, when he threw a career-worst 29 interceptions as the Packers went 4-12.
Surrounded by an underrated group of wide receivers who proved hard to tackle after the catch, Favre had a career-high completion percentage of 66.5. He threw for 4,155 yards, 28 touchdowns and only 15 interceptions.
Before the Packers' Jan. 12 divisional playoff game against Seattle, Favre told his hometown newspaper that he wasn't approaching the game as if it would be his last and was more optimistic than in years past about returning.
"For the first time in three years, I haven't thought this could be my last game," Favre told the Biloxi (Miss.) Sun Herald. "I would like to continue longer."
But Favre finished the season on a sour note, struggling in subzero temperatures in a 23-20 overtime loss to the New York Giants in the NFC championship game.
Afterward, Favre was noncommittal on his future. McCarthy said he wanted Favre to take a step back from the season before making a decision.
Now he has - to walk away.
"The Packers owe him a tremendous debt of gratitude," Thompson said. "The uniqueness of Brett Favre his personality, charisma and love of the game - undoubtedly will leave him as one of the enduring figures in NFL history."