The former England international had been at Stamford Bridge for a year but did not make an appearance, although was in Baku for Wednesday’s 4-1 Europa League final win over Arsenal.
Green started his career at Norwich and made 12 appearances for England.
He said in a statement: “Following an incredible evening in Baku on Wednesday and after a 23-year career spanning three decades, I’ve decided that now is the right time to announce my retirement from professional football.
“Being part of the group and celebrations with such a special squad of players after winning the Europa League seems a fitting way to end what’s been an amazing journey for me in the game.”
Green also played for West Ham, QPR and Leeds, winning promotion to the Premier League with the Hammers and Rangers.
He won the First Division title with Norwich in 2004 and started the 2010 World Cup as England’s first choice goalkeeper. But Green was dropped following the opening 1-1 draw with the United States after allowing Clint Dempsey’s tame shot to creep through his legs. Green added: “I’ve had the joy of representing some fantastic clubs, all of whom have helped to shape me in their own varying way.
“Thank you to all of the fans and everybody connected with Norwich City, West Ham United, Queens Park Rangers, Leeds United, Huddersfield Town and Chelsea. Representing my country will always be one of my proudest achievements and I feel honoured to have played for England.”
He played 46 times for Leeds from 2016-17 before moving to Huddersfield in their first season in the Premier League, but he did not make an appearance.