Owen, who at his peak was one of world football's most feared strikers, turned 33 in December and since joining Stoke City from Manchester United in September has scored only once in six substitute appearances in the Premier League.
The striker said in a statement on his official website: "It is with an immense amount of pride that I am announcing my intention to retire from professional football at the end of this season."
Owen scored 40 goals for England in 89 appearances, though the last of those came in 2007 against Russia as he was cast into the international wilderness by Fabio Capello. The highlights of his England career include a seminal goal against Argentina at the 1998 World Cup at the age of just 18 and a hat-trick against Germany in Munich in 2001.
He will leave a legacy as one of the most talented strikers England has seen in the modern era, having scored 158 goals in 297 appearances for Liverpool as well as winning the prestigious Ballon d'Or award in 2001.
He also went on to represent Real Madrid, Newcastle United and Manchester United, where he won the Premier League in 2011, before joining Stoke.
He said: "I have been very fortunate in that my career has taken me on a journey that like many young players starting out, I could only have dreamt of."
Persistent fitness problems blighted the latter years of his career, prevented him from making an impact at the Britannia Stadium and he will now step away from the professional game at the conclusion of the season.
After exploding onto the scene as a lightning-quick teenager, Owen helped Liverpool to a famous treble in 2001 as they won the FA Cup, League Cup and UEFA Cup under Gerard Houllier and he also won the League Cup again in 2003 before leaving the club to join Real Madrid for £8 million.
His sole season at the Bernabeu saw Owen score a very respectable 13 goals in 35 Liga games but no trophies were forthcoming and he joined Newcastle United for £16 million in the summer of 2005 when being deemed expendable by Madrid.
In four seasons at St James' Park he made only 58 league starts - scoring 26 goals - as he suffered from a succession of injury problems, the most serious of which was a cruciate ligament rupture at the 2006 World Cup finals.
Following Newcastle's relegation in 2009 he made a shock move to Manchester United and although he was always a fringe player under Sir Alex Ferguson, Owen added a 2009 League Cup medal and a 2011 Premier League triumph to his trophy cabinet.
Owen added: "None of this would have been possible without the tremendous support I have received from managers, coaches, fellow players, back room staff, the supporters and my own personal sponsors. I would like to thank each and every one for the huge role they have played in helping me reach the top of my profession.
"Most of all though, I would like to thank my family. To my beautiful wife Louise, for her continued love and support through the many ups and downs in my career and for affording me the most precious gift of all, our children.
"To my Mum who has always taken the brunt of my frustrations yet continues to keep our family so tight-knit, a trait that has formed the foundations of my own success. Her dedication to me and my brothers and sisters is immeasurable.
"I'd like to thank Terry, Andy, Karen and Lesley for being so understanding and creating the perfect environment to grow up in. Last but not least, my dad. We did it my old mate! From those freezing local parks to terrorising the best defenders in the world on the biggest stages of all. I couldn't have done it without you."
BBC Sports Personality of the Year and PFA Young Player of the Year in 1998, Owen will be hoping to add to his 222 career club goals before the end of the season.
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