The 33-year-old, who signed a short-term contract with MK Dons four weeks ago, has been forced to give up the game due to a persistent knee injury.
Bullard suffered two serious cruciate ligament injuries - for Fulham in September 2006 and Hull in 2009 - and ongoing complications convinced him to visit a specialist last week, only to be advised that it would be best for him to retire.
“My old knee injury has never allowed me to get back to where I want to be as a football player," he told MK Dons' official website. "It’s always hindered me.
"There are a lot of games in this league and I now know my knee won’t allow me to play Saturday-Tuesday-Saturday-Tuesday, it’s not built for that now.
“I want to be out there playing but at the same time I know my knee won’t allow me to play at my best and to keep my place in the team. I’m hindering myself more than I am helping myself for the future.
“In the summer I knew I wanted to give it one last crack and show people what I could do. But what I think with my strong head and what I could physically do are two different things. My head tells me I can do it, but my body tells me, no Jim you can’t.”
Bullard joined West Ham from Gravesend & Northfleet in 1999 before coming to prominence following a move to Peterborough United in 2001.
From there he joined Wigan Athletic in 2003, going on to help the Latics reach the Premier League and establish himself as a respected and much-liked top-flight player in the process.
Fulham brought him to Craven Cottage for £2.5 million in 2006 before a knee injury suffered in a game against Newcastle forced him out of the game for a prolonged period.
Hull paid a club-record £5m for him in January 2009 but he lasted just 37 minutes before succumbing to another injury following a tackle from Scott Parker - who also injured him in the Newcastle match.
He had his contract annulled at Hull following disciplinary issues and subsequently spent a spell at Ipswich before making three appearances for MK Dons this season.