The 36-year-old had been without a club since leaving Bournemouth in the summer and has now called time on his playing career.
Cahill progressed through the Aston Villa academy and, after his professional debut in 2004, spent the majority of the next two decades playing in England's top flight while also earning 61 caps for his country.
"Football is a game that has given me so much enjoyment and success and as I make the decision to hang up my boots, I can honestly say I gave it everything I had," the two-time Premier League winner wrote on social media.
"I've achieved things I once dreamt of, creating some incredible memories. From amazing highs like winning the Champions League and Premier League, to the privilege of captaining my country and Chelsea in an FA Cup winning team will remain with me forever.
"I've also made some fantastic friendships with people across the football world, from team-mates, managers, and the unsung heroes behind the scenes, I just want to say a massive thank you.
"Taking the decision to stop playing is not an easy one. I've spent 20 years training every day, putting in the work to be in the best possible shape for matchday to help the teams I've played for be successful.
"I've had time to consider my options and after much deliberation and reflection I feel now is the time to move on to the next stage of my career."
Cahill spent last season at Bournemouth but failed to play during the final four months of the campaign after a red card in a defeat at Barnsley on January 29 that proved his last ever appearance.
After starting his career at Villa, it was a move to Bolton in 2008 which earned the centre-back England recognition and he would feature at two World Cups and Euro 2016 for the Three Lions before he stepped away from international duty in 2018.
A lengthy spell at Chelsea saw Cahill win multiple trophies including the Champions League in 2012 before he bowed out of the Premier League following two seasons at Crystal Palace under old England boss Roy Hodgson.
He added: "A special thank you must go to my amazing family who have supported me and been there every step of the way.
"I now have the opportunity to spend some quality time with them which is something I'm looking forward to.
"Beyond that, football will always be part of who I am and what I love so this is just the end of this chapter. For me it's important to look forwards not backwards as a new chapter in my life begins."