The 34-year-old, who left Southampton at the end of last season, scored more than 100 goals for Arsenal and won 47 England caps.
Walcott had been linked with a move to Bournemouth along with League One outfit Reading.
But he has decided to call time on his career, which has seen him win three FA Cups and two Community Shields.
In total, Walcott featured 563 times during his club career, where he banged in 129 goals in all competitions, with 80 coming in the Premier League.
The bulk of his career was spent in north London after he joined the Gunners in January 2006 aged 16 from the Saints for an initial £5million fee rising to £12m.
READ MORE FOOTBALL NEWS
Liverpool want three midfielders, Olise snubs Chelsea, Walcott retires, Mitrovic to Saudi
Mikel Arteta hints at further Arsenal transfers to cover for injured Jurrien Timber
Despite not featuring for Arsenal in the second half of the 2005/06 season, then-England boss Sven-Goran Eriksson named him in his World Cup squad.
But the winger failed to feature in Germany, though he did become the Three Lions' youngest player at the age of 17 years and 75 days when he appeared in a friendly win over Hungary in May 2006.
Walcott's debut for Arsenal came in August 2006, where he supplied the assist for Gilberto Silva's equaliser against Aston Villa - the club's first Premier League goal at the Emirates.
His first strike for Arsenal came in the 2007 League Cup final against Chelsea, though the Blues ultimately ended up as 2-1 winners.
Most read in Football
Liverpool want three midfielders, Olise snubs Chelsea, Walcott retires, Mitrovic to Saudi
England v Spain LIVE commentary: Lionesses eye glory in Women's World Cup final
Man City and Arsenal stars dominate as Players' Player of the Year shortlist revealed
Europa League group stage pots: Seedings confirmed for West Ham, Liverpool and Brighton
As he became a first-team regular under Arsene Wenger, he earned an England recall in 2008, where he scored a memorable hat-trick against Croatia.
He remains the youngest player to ever bang in a treble for the Three Lions - doing so at the tender age of 19.
Walcott's best personal season came in the 2012/13 campaign, where he fired in 21 goals in all competitions for Arsenal.
An injury picked up against Tottenham in the FA Cup third round in January 2014 saw him miss the final victory over Hull - along with 11 months of action.
Though his iconic gesture to the travelling Spurs supporters where he lifted up two fingers to symbolise the 2-0 scoreline as he left the pitch on a stretcher will live long in the memory of the Arsenal fanbase.
He quickly made up for lost time, with his fine performances seeing him named in the 2015 FA Cup final, where he opened the scoring in the 4-0 win over Villa.
After 12 years at Arsenal where he banged in 108 goals in 397 matches, Walcott opted to make the move to Merseyside to join Everton in January 2018.
But he was on the move again in 2020 - returning to St Mary's on an initial loan deal, before it was made permanent.
His second spell on the south coast saw him fire in five goals in 58 games.
Read More on talkSPORT
'That was a big bang' - Helenius doesn't remember the moment he was KO'd by Joshua
Fans in stitches as Harry Kane stands quietly next to ref as Bayern Munich teammates argue
Unable to keep Southampton in the Premier League last term, the Saints opted against handing Walcott a new contract.
And Walcott, who has been a fan favourite at all three of his clubs, has now decided to call it quits after an 18-year career.