Now aged 43, the Blues' one-time record signing is to finish his playing career with J-League club Sagamihara.
Kawaguchi appeared for Japan 116 times and was included inÂ four-successive World Cup finals squads, starting from France 1998.
In a statement released by his club, he said: '˜I've decided to retire at the end of this season. All I have is a sense of appreciation.'
Kawaguchi endured an unsuccessful time at Fratton Park after signing for Â£1.8m in September 2001.
He failed to impress following a much-publicised arrival, making only 13 appearances over two seasons.
Yoshi, as he was largely known by Pompey supporters, made his final appearance in the last match of the 2002-03 Division One title-winning campaign.
As a gesture, Harry Redknapp introduced the keeper off the bench at half time in the 5-0 success at Bradford City.