The 34-year-old, who started out his senior career on the books at Manchester United, had moved to Belgian outfit KV Kortrijk this summer following nine years with Watford, where he enjoyed six seasons playing in the Premier League.
He also spent a period in the English top-flight with Blackpool in 2010/11 following his departure from Old Trafford.
Cathcart made 73 appearances in total for Northern Ireland and starred in all four of their matches at the European Championship finals in the summer of 2016.
The Belfast-born defender captained his country twice during their UEFA Euro 2024 qualifiers against San Marino and Finland earlier this year.
"Dear GAWA,” he said. “After much careful consideration, I have made the difficult decision to retire from football.
“It was not an easy choice to make, but at this stage of my life I can no longer ignore the fact that my enthusiasm and motivation to play the game is not what it once was.
“I would like to express my gratitude to everyone at KV Kortrijk for their understanding and acceptance of my decision to retire. I wish them all the very best for the future.
“Playing for Northern Ireland was always an experience I treasured.
“From winning my first cap against Slovenia in 2010 to the career high of competing at the Euros in 2016, it has been an honour and a privilege to wear the green jersey in front of, to my mind, the best fans in the world.
“I consider myself incredibly privileged to have had an 18-year career in football, filled with fantastic experiences at both club and international level.
“I would like to extend my heartfelt thanks to everyone who has helped and supported me throughout this journey.
“I have formed lifelong friendships and created unforgettable memories that will forever hold a special place in my heart.
“Thank you all once again.
National team boss Michael O’Neill also paid tribute to Cathcart following his retirement.
“Craig was always a key player for me,” he said. “He was a positive presence around any camp, due to his skillset both on and off the pitch.
“We wish him well in his future endeavours.”