The 41-year-old center-back said the decision was born out of a desire to spend more time with his family, though he hopes to remain involved in football.
"It's a special day for me. Today, I'm finishing my career as a professional footballer," Lucio told Globo Esporte. "I'm very proud and grateful ... to everybody who has directly or indirectly supported me over the years."
Lucio, who earned 105 Brazil caps, was a key member of the Ronaldo-inspired side that won the 2002 World Cup in Japan and South Korea. He captained the Selecao from 2006 to 2011.
The defender's club career included spells at Bayer Leverkusen, Bayern Munich, Inter Milan and Juventus. In 2010, he helped Jose Mourinho's Inter Milan clinch a historic Champions League, Scudetto and Coppa Italia treble.
Lucio ended his playing days with Brazilian Serie D outfit Brasiliense in his home city of Brasilia.