The 35-year-old has been weighing up his options since leaving Sunderland earlier this summer, and will now consider his next steps in the game.
The hugely popular midfielder says the memories of his two spells at the club his family have supported since he was a boy 'will live with him forever'.
Leadbitter made a total of 210 appearances for his boyhood club Sunderland, scoring 18 goals during two stints on Wearside.
Leadbitter also thanked Middlesbrough and Ipswich Town for their part in his career after he enjoyed stints at both clubs during a stellar playing career.
Writing on Instagram, Leadbitter said: "The time has come to officially end my days playing professional football.
"After taking a few months off to enjoy a holiday with the family and reflect, I've realised I am ready to retire.
"Of course there has been the temptation to carry on, but since playing my final game for Sunderland in May I had it in my mind I wasn't going to play on. I just wanted to be sure it was the correct decision.
"For me to finish my second and final spell at the club where it all started, the one I supported as a boy, and where I loved going with my mam and dad, just seems right.
Here, we take a look at his best and most emotional moments in red and white.
1. Making his debut!
Coming up through Sunderland's youth academy Leadbitter's first professional appearance for his hometown club came as a substitute in a League Cup defeat against Huddersfield Town in September 2003. It was bittersweet for the young Leadbitter as Third Division Huddersfield rubbed salt into Sunderland's wounds as they dumped the Division One side out of the Carling Cup.
Photo: Warren Little
2. Scoring a cracker against Burnley to give Sunderland hope
Under Roy Keane, Sunderland were 2-0 down against Burnley in 2006 before a cracker from Grant Leadbitter and a stoppage-time equaliser from David Connolly handed the Black Cats a vital point and some momentum in their race for promotion.
Photo: Clive Brunskill
3. Netting against Barnsley!
Roy Keane's in-form Sunderland recorded their ninth win in 11 Championship games. Substitute Daryl Murphy set-up midfielder Grant Leadbitter to fire them in front with a right-foot shot. And in the last minute David Connolly scored to the delight of the over 8,000 away fans at Oakwell.
Photo: Clive Brunskill
4. Grabbing the winner against Southampton with another stunner
Sunderland went top of the Championship table after coming from behind to see off play-off hopefuls Southampton after stunners from Carlos Edwards and Grant Leadbitter handed the Black Cats a come-from-behind win at St Mary's back in 2007. A crucial result as Sunderland eventually went on to win the Championship under Roy Keane.
Photo: Christopher Lee