Scott made a total of 161 appearances and scored 27 goals for England. She left Manchester City at the end of last season after stints on loan at Everton and Aston Villa.
"Today, I may be saying my goodbyes to football, but we're going to make this a celebration. No sad faces!! We've had too much fun for any tears," Scott said in a statement.
"It will be hard to imagine an England squad without her as she has been an icon of the team for so long," England head coach Sarina Wiegman said in a statement.
"I respect her decision, but we will miss her positive impact on and off of the pitch for sure."
The Lionesses lifted their first major trophy in July after beating Germany in the European Championship final.
Scott was also part of the squad who were runners-up in the 2009 edition of the tournament after losing to Germany in the final.
"I am just a big ball of disbelief, even now. I have a gold medal. I can't stop looking at it, three weeks later. It's so heavy. It's so real," Scott said.
She left Manchester City, who she joined in 2013, at the end of last season after stints on loan at her former club Everton and Aston Villa.
Her retirement follows that of England women's all-time top goalscorer Ellen White (33), who also announced she had retired on Monday.
