The former Spain midfielder intends to go into coaching at Serie B side Como, where he played last season.
Fabregas came through the youth ranks of Barcelona but made his professional debut at Arsenal before returning to the Camp Nou.
Fabregas also turned out for Chelsea and AS Monaco.
Fabregas has the second most assists in Premier League history with 111.
He won the English top flight twice with Chelsea and a La Liga title with Barcelona.
Fabregas earned 110 caps for Spain, and was part of the sides that won two European Championships and the 2010 FIFA World Cup.
"It is with great sadness that the time has come for me to hang up my playing boots," Fabregas announced on Saturday.
"From my first days at Barca, Arsenal, Barca again, Chelsea, Monaco and Como, I will treasure them all.
"From lifting the World Cup, the Euros, to winning everything in England and Spain and nearly all the European trophies, it has been a journey that I’ll never forget.
"All those who have helped me, my teammates, coaches, directors, presidents, owners, fans and my agent. To all my family, from my parents and my sister to my wife and kids, I cherish your advice, mentorship and guidance.
"To my opponents who tried to knock me, thank you for making me stronger.
"It has already been more than worth it with all the great memories and friends that I have made on the way. I’ve also learnt 3 languages and became more compassionate and wiser along my travels.
"I lived experiences that I never thought in a million years I would even come close to.
"It’s not all sadness though as I’m now going to cross the white line and start coaching the B and Primavera teams of Como 1907. A club and a project I couldn’t be more excited about. This charming football team won my heart from the first minute and came to me at the perfect time in my career. I will grab it with both hands.
"So after 20 incredible years full of sacrifice, dedication and joy, it’s time to say thank you and goodbye to the beautiful game.
"I loved every minute.
Cesc."
