Lloris captained France to a World Cup triumph in 2018 and silver in 2022.
The goalkeeper, who also captains Tottenham, ends his storied international career with record setting 145 caps to his name, overcoming previous record holder Lilian Thuram (142 caps).
"There comes a time when you have to know how to hand over the reins," Lloris said in an interview with L'Équipe.
"I think the team is ready to continue, there is also a goalkeeper who is ready," he added, perhaps pointing to Milan's number one Mike Maignan as his successor.
"I prefer to go out at the top than wait for a slump," he continued. His last national team game was the World Cup final in Qatar, where France lost in a penalty shootout to Argentina.
"There is also the matter of family, I feel the need to spend more time with my wife and children."
France head coach Didier Deschamps said Lloris was retiring at his peak and despite still having a place in the national set-up but called on fans to respect his decision.
"A great servant of the French team is taking his leave and I would like to pay tribute to his exceptional career," Deschamps said.
"Beyond all the records that his talent and professionalism enabled him to break, beyond the essential role that he played in our greatest victories... Hugo is a remarkable person on a human level.
"It was a pleasure and an honour for me to be his coach. I wish all coaches had players like him to coach. Hugo has my respect and gratitude. I wish him happiness."