The 34-year-old has been without a club since leaving Bury at the end of last season and has decided it's time for a "new challenge".
Healy, who scored 36 goals in 95 international appearances, told BBC Sport: "I don't think too many people will be surprised. I have been without a club for five months. "It's dawned on me that it's time for a new challenge. The career is over and it's time to move on."
Healy's club career was arguably less successful, bar an impressive spell at Preston North End. Having come through the ranks at Manchester United, he moved to Deepdale in 2001 and went on to score 45 goals in 139 games.
A move to Leeds United followed before spells at Fulham and Sunderland, where he was farmed out on loan to Doncaster and Ipswich. In 2011 he joined boyhood team Rangers and helped them to the Scottish League Cup before returning south to link up with Bury.
"I didn't enjoy my last six months at Bury because of a number of circumstances," he said. "I still thought in the summer that I was capable and would be fit enough if I got a good pre-season under my belt.
"But that didn't happen and it's hard going down to the gym and doing 20 or 30 minutes of aerobic stuff on your own. It would have been great to have achieved 100 caps but at the same time I didn't want to be getting token caps."