The former Blue Jays and Mets first baseman announced his decision at a news conference in San Juan, Puerto Rico.
"There comes a moment when you have to have the dignity and the sense to recognize that something is not functioning," the two-time All-Star said. "You can't swim against the current."
The 38-year-old had been attempting to return from three hip surgeries in an 18-month span. He had a torn labrum repaired and a bone spur shaved from his right hip in May 2009 and underwent two additional hip operations in 2010.
He played in five games last season for Boston's Triple-A Pawtucket affiliate. He played in 26 games for the Mets in 2009 before his hip injury ended his season.
The left-handed first baseman hit 473 career home runs to rank 30th all-time in big league history. His .546 career slugging percentage ranks 28th all-time, while his 1,512 RBIs rank 49th highest. He hit .280.
"Carlos was kind enough to call yesterday to let us know of his decision and he and I had a great conversation," Mets chief operating officer Jeff Wilpon said. "We salute and congratulate Carlos on his significant accomplishments on and off the field with the Mets, and throughout his outstanding 17-year Major League career. We wish Carlos, his wife Betsy, and their family all the best in his retirement from baseball."
Born in Aguadilla, Puerto Rico, Delgado, who grew up idolizing Hall of Famer Roberto Clemente, is the all-time home runs leader among his countrymen.
Delgado was a catcher in the Blue Jays' system before making the transition to first base upon being called up in 1993. He played just two games with Toronto's World Series champion club that season, and did not see postseason action.
His career in Toronto lasted 12 seasons. He is the club's all-time leader in home runs (336), RBIs (1,058), extra-base hits (690), doubles (343), slugging percentage (.556) and walks (827).
Delgado was the American League's 2000 Hank Aaron Award winner, an honor awarded annually to the best overall offensive performer in each league. He hit .344 with 41 homers, 137 RBIs and a league-leading 57 doubles and made his first All-Star team that season.
Delgado earned his second trip to the Midsummer Classic in 2003, when he hit .302 with 42 homers while leading the league with 145 RBIs. He finished second in voting to Alex Rodriguez for the AL MVP Award. He had a four-homer game against Tampa Bay, and is the last Major Leaguer to accomplish the feat.
Delgado inked a a four-year deal with the Marlins prior to the 2005 season, but was traded to the Mets following the season. He hit .301 with 33 homers and 115 RBIs in his only season in Florida.
Delgado continued to pile gaudy power numbers upon joining the Mets in 2006, when he hit 38 homers and drove in 114 runs as New York came one game short of reaching the World Series against the Cardinals in the National League Championship Series.
Delgado played four seasons with New York, his last full season being 2008, when hit .271 with 38 home runs and finished ninth in voting for the NL MVP Award.
Delgado, who is actively involved in improving the lives of children in his native Puerto Rico, was awarded the Roberto Clemente Award in 2006. Presented annually, the Clemente Award honors the Major League Baseball player who combines outstanding play on the field with devoted work in the community.
Matt Weber is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.