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."
Early in training camp, Rice moved into Denver's third receiver spot and things looked promising. In retrospect, the promotion was more a reflection on Darius Watts, who struggled catching the ball, but improved as the preseason went on.
By the time preseason ended, Rice had only four catches for 24 yards and had been pushed back down the depth chart. As expected, he wasn't released when the Broncos announced their final round of cuts Saturday, but he was already in the Bay Area deciding his future.
"To me it was never about what I accomplished on the football field. It was about the way I played the game," he said. "I play the game with a lot of determination, a lot of poise, a lot of pride. I think what you saw on the field was an individual who really loved the game and I was just like a little kid. I enjoyed the preparation and the hard work and the dedication that I had to make to try to be one of the best receivers to have ever played the game."
His agent, Jim Steiner, has said if Rice retired this time, he would not try to come back with another team. If that's so, Rice will close his career with 38 NFL records, including those for career receptions (1,549), yards receiving (22,895) and touchdowns receiving (197).