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The versatile 40-year-old was out of contract after spending the past three seasons with Brighton.
Milner played for six teams in England's top flight and broke the record for most Premier League appearances in February.
He started his career with Leeds and went on to win three Premier League titles - two with Manchester City and one with Liverpool - and also helped the Reds win the Champions League in 2019.
Milner made his England debut while with Aston Villa in 2009 and ended his international career with 61 caps.
"I've been fortunate enough to experience some unforgettable moments, from fighting for survival to winning trophies, playing in Europe, and representing my country at two European Championships and two World Cups," read a statement by Milner, external on social media.
"But more than anything, it's the people and friendships I've made throughout the game that I'll cherish forever."
Milner made his Leeds debut at 16 in November 2002 and at the time was the second-youngest player to play in the Premier League.
The following month he became the youngest player to score in the Premier League and is now third on that list, behind Max Dowman and James Vaughan.
Milner missed most of the 2024–25 season through injury but played 22 games in all competitions in 2025-26, making his 658th and final Premier League appearance during Brighton's last game of the season.
"From making my debut for Leeds United, who I supported growing up, at the age of 16 and becoming the Premier League's youngest scorer, I could never have dreamed of the journey I've been on, right through to not being able to lift my foot last year and then coming back to be part of Brighton qualifying for Europe for the second time in their history at the age of 40," he added.
After spending two years in the first team at Leeds, Milner was sold to Newcastle after his boyhood club were relegated to the Championship in 2004.
He then joined Villa in 2008 and Manchester City in 2010, helping them to their first two Premier League titles in 2012 and 2014.
Milner left for Liverpool in 2015 and spent eight seasons at Anfield, scoring 26 goals from 332 appearances.
In 2020, he helped the Reds win their first league title since 1990 and lifted the FA Cup and League Cup with both Liverpool and City.
"I leave the game with immense pride, gratitude and memories that will stay with me for the rest of my life," Milner said.
"Football has given me far more than I could ever have imagined, and I will always be thankful for the opportunities it provided.
"Thank you to everyone who has been part of the journey."
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