The 35-year-old - who will tun 36 in April - began her professional career with Sunderland before stints with Leeds Carnegie and Arsenal, whom she represented from 2010 to 2013.
Houghton won six major honours during her time with Arsenal, including two Women's Super League titles, before making the move to Manchester City on New Year's Day 2014.
Since swapping North London for the Sky Blues, Houghton has achieved legend status during an illustrious 10-year spell and is the only player remaining at the club from their original women's professional team.
The centre-back has clinched one WSL title, three Women's FA Cups and four Women's League Cups while on the books at Man City, in addition to making the WSL Team of the Year in the 2017-18 and 2018-19 campaigns.
A glittering stint in England colours has also seen Houghton make 121 appearances for the Lionesses - putting her seventh in the all-time charts - and score 13 goals, taking the bronze medal with the team at the 2015 World Cup.
Houghton also represented Great Britain at the 2012 and delayed 2020 Olympics, but she is without an England appearance since 2021 and believes that now is the right time to end her playing chapter.
"There is no easy way to say it, but I am retiring from football at the end of the current WSL season. Taking the decision to retire, is such a difficult thing to do. Whilst age comes to every player, it makes it no easier having to say the words out loud. Football has been my life; my passion and I have loved the career I have had," Houghton wrote on her website.
"It has been an honour and a privilege to represent Sunderland, Leeds Utd, Arsenal and to have been on the incredible journey that I have been on, with Manchester City over the past ten years.
"I will always be humbled to have made so many domestic appearances, to have captained my country and to have represented England and Team GB in so many international tournaments. I will always be very proud of everything that I have achieved in the game.
"Whilst I have been lucky to have had special moments on the pitch, it gives me a lot of satisfaction what the game has achieved off the pitch during my career. The game has moved so quickly from amateur to professional over the last twenty years. I thank the trailblazers that came before me, for your perseverance and commitment to effecting change for my generation.
"I hope that I leave the game in a better place than when I started, and that I have contributed in some small way to giving the girls of tomorrow a better future in football. I am excited for whatever comes next but, in the meantime, I remain focused on giving everything I have left for Manchester City, over the next two months."
During her decade-long spell in City colours, Houghton has turned out for the Citizens 241 times - more than any other women's player - and head coach Gareth Taylor labelled the 35-year-old an "icon of the game".
"Steph is - without question - an icon of the game. Although her professional career on the pitch is now coming to an end, her legacy will be felt for so many years to come. She's paved the way for so many to thrive in the future," Taylor told the official Man City website.
"Steph has lived and breathed football for such a long time, and she leaves it in the strongest place it has ever been - a true testament to her leadership, hard work, talent, and dedication. I feel incredibly privileged to have been able to work with her since 2020 and know her name will be written into the history books as a true footballing great.
"Steph will excel in whatever she puts her mind to, and on behalf of everyone here at Manchester City, I'd like to express our immense gratitude and wish Steph all the very best for the future."
Houghton has made just three WSL appearances this season for Man City, who are second in the top-flight table, only trailing perennial champions Chelsea on goal difference.
Taylor's side eased to a 3-1 win over local rivals Manchester United last weekend and are next in action away to Liverpool on Saturday lunchtime.