The 35-year-old Manchester City defender, who won 121 caps for the Lionesses, will end her playing career at the end of the current Women's Super League campaign.
Houghton began her career with northeast club Sunderland in 2002 and also represented Leeds Carnegie and Arsenal before moving to City 10 years ago.
"There is no easy way to say it, but I am retiring from football at the end of the current WSL season," Houghton said in a statement published on her own website.
"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.
"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."
City head coach Gareth Taylor said: "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."
Houghton featured in five major international tournaments after making her international debut in 2007 but last appeared for England in 2021, before being left out of the Lionesses' victorious Euro 2022 squad after failing to recover in time from Achilles surgery.
Away from football, Houghton has also campaigned to raise funds for research into Motor Neurone Disease, with her husband Stephen Darby - the former Liverpool defender - suffering from MND.
