Ballack brings end to long career
Having turned 36 at the end of last month, Ballack has been without a team after his two-year deal at Bayer Leverkusen expired in June.
Since leaving Bayer, Ballack had been reported to be negotiating with clubs in USA's Major League Soccer and Australia's A-League, but has decided to hang up his boots.
"At 36 years of age, I can look back on a long and wonderful time in professional football, which I could never have dreamed of as a child," he said in a statement.
"It was a privilege to have worked with world-class coaches and fantastic players. Of course, I will miss playing or scoring a goal in front of 80,000 fans, but the last few months without football have shown me that it is time to stop.
"I am looking forward to a new chapter in my life and thank my family and all the awesome people who have helped and supported me. They are all a big part of my success."
Ballack made the last of his 98 appearances for Germany when he captained the team during their friendly defeat against Argentina in March 2010, having made his national debut back in April 1999 against Scotland.
An ankle injury he suffered playing for Chelsea in the FA Cup final in May 2010 ruled Ballack out of the last FIFA World Cup™ in South Africa, when he lost the captaincy of the national team to Bayern Munich's Philipp Lahm.
Having played for Kaiserslautern, Bayer and Bayern in the Bundesliga, Ballack spent four years at Stamford Bridge with Chelsea between 2006 and 2010.
He was part of the Blues team which lost the 2008 UEFA Champions League final to Manchester United in Moscow, before captaining Germany to the UEFA EURO 2008 final where they suffered a 1-0 defeat by Spain in Vienna.
Ballack is a veteran of two FIFA World Cups - he was suspended for the 2002 Final, when Germany lost 2-0 to Brazil in Japan, before leading the Germans to third at the 2006 tournament, which they hosted.