Lichtsteiner played for Augsburg in the German Bundesliga last season and made 20 appearances but has decided to hang up his boots.
The former Switzerland captain had hopes of appearing for his country one last time at EURO 2020 but the Coronavirus pandemic forced the tournament to be rescheduled to next year.
Lichtsteiner won 108 caps for the Swiss national team and appeared at two European Championships and three FIFA World Cup tournaments.
"The plan would have been to retire after the European Championship in 2020," Lichtsteiner, who was Switzerland captain, said in an interview published by the Swiss Football Association.
"After UEFA's decision to postpone the European Championship to 2021, it became clear to me that the time had come and I didn't want to add another year.
"The length of a footballer's career is limited. I was allowed to play at a high level until I was 36. Now, it's time to take a new path. It was a cool time that I really enjoyed."
"Every tournament was an incredible event," he added. "I always felt a tingling feeling. It was a shame we narrowly missed out on the quarter-finals in the last three tournaments, which were of a high level.
"If you're able to play more than 100 international matches, that makes you proud. Every single game was an honour. And each one felt like it was the first, in terms of nervousness!"
Lichtsteiner’s most successful spell in club football came at Juventus, where he won seven league titles, four Coppa Italia trophies and three Italian Super Cups. He also finished on the losing side in two UEFA Champions League finals with the Old Lady.
Lichtsteiner also lost the Europa League final with Arsenal last year.
