The 40-year-old scored 164 goals in 381 games during his time at Stamford Bridge.
He also won four Premier League titles and the 2012 Champions League with the Blues.
Drogba spent the last 18 months of his career with US club, Phoenix Rising, which he was also a co-owner.
The veteran striker took to his Instagram page to announce his retirement, stating that he has had an “amazing 20 years’’ in his professional career.
He wrote: “1989 or where it all started!! When I think of the last 20 years of my professional career, looking at this picture can’t make me more proud of what I’ve achieved as a player but most importantly how this journey has shaped me as a man.
“If anyone tells you your dreams are too big, just say thank you and work harder and smarter to turn them into reality. #alwaysbelieve
“I wanna thank all the players, managers, teams and fans that I have met and made this journey one of a kind!!!
“Also a huuuuge thank you and love to my family.
“My Personal Team for supporting my entire career during all the ups and downs no matter what.
“Looking forward to the next Chapter and hoping God will bless me as much as he did for my football career DD11.”