The LA Galaxy forward is widely considered the best player in American history. The 32-year-old Donovan is the top goal-scorer in MLS history and the top scorer in U.S. national team history.
"I feel incredibly blessed and lucky to have played a role in the remarkable growth of MLS and US Soccer during my playing career," Donovan said Thursday in a statement on his Facebook page. "And while my career as a player will soon be over, rest assured I will stay connected on many levels to the beautiful game."
Donovan was named the most valuable player of his 14th MLS All-Star game on Wednesday night in Portland, scoring a goal in the All-Stars' 2-1 win over Bayern Munich. He has been a key component of MLS' impressive growth during his 14 years in the top North American league, choosing to pursue a pro career in his native California instead of Europe.
Donovan, a five-time MLS champion with the Galaxy and the San Jose Earthquakes, agreed to a multiyear contract extension with the Galaxy just a year ago, pronouncing himself revitalized after an extended sabbatical. He took several months off following the Galaxy's second straight MLS Cup title alongside now-retired David Beckham in December 2012.
"After spending half my life as a professional soccer player, I also am excited to begin a new chapter and pursue other opportunities that will challenge me and allow me to grow as a person," Donovan said.
Donovan was not included on his fourth U.S. World Cup team this summer. He was surprised and disappointed by coach Jurgen Klinsmann's decision, feeling he had done enough in training camp to warrant inclusion.
"Quite simply the best player ever to wear the USMNT jersey," U.S. Soccer Federation President Sunil Gulati posted on his Twitter account.
Donovan is the career U.S. leader with 57 international goals over 156 appearances, and he has scored five World Cup goals, including his famed stoppage-time goal against Algeria four years ago to send the Americans to the second round. He watched the American team in Brazil from afar as a television commentator.
"As we enter a transformative time for the sport, I will do everything I can to help the continued growth of soccer in the United States," Donovan said. "I look forward to making a difference, pursuing my passions and meeting all of you along the way in this next phase of my life."
Donovan has played for the Galaxy since 2005, also going on loan to Everton and Bayern Munich during the Galaxy's offseason. Donovan struggled early in his pro career with Bayer Leverkusen in the Bundesliga, but was popular during his two stints with Everton.
"Congratulations on a great career to landondonovan as he announces he'll retire later this year. Part of EFC fabric," Everton tweeted from its official account.
Donovan has four goals and seven assists in 17 games for the Galaxy this season as a midfielder and a forward. He passed Jeff Cunningham for the career MLS goals record shortly after Klinsmann excluded him from the World Cup team.
His absence creates another hole for the LA club, which couldn't manage a third straight MLS title last season in its first year since Beckham's departure. But Donovan's retirement opens up a designated player spot for the Galaxy alongside leading scorer Robbie Keane and U.S. national team defender Omar Gonzalez.