The 39-year-old’s career spanned a 22-year period, which saw him play for nine different sides at club level, while also achieving 57 caps for England.
The striker made 36 outings for the Blues between January 2008 and January 2009, where he found the net 17 times.
Moves to Spurs, Toronto, Sunderland and Bournemouth would follow before making an emotional reunion to the Stadium of Light in February.
He returned to the Black Cats after being released by Rangers in January, but after seven games for the Wearsiders he has decided to cut his time in the northwest short.
Defoe is currently the Premier League’s ninth highest goalscorer of all time and scored a total of 324 goals at all levels in 558 appearances for both club and country,
Announcing the decision on Twitter, he said: ‘After 22 years in the game, I have decided to retire from professional football. It has been a really tough decision, and one I have discussed with my family and those closest to me.
‘I made my professional debut at 17-years-old, and I feel now is the right time to bow out. I have had an incredible journey, and have met some amazing people in the game.
‘Football will always remain in my blood, and it gives me great pride and satisfaction to look back on the blessed career that I’ve had. I now look forward to spending some quality time with my friends and family before moving forward on this next chapter in my career.’