The Nigeria international was diagnosed with acute leukaemia in July 2017, but announced he was in "complete remission" after "a tough year and intense chemotherapy" in June.
While his retirement comes after consulting medical experts, Nigeria's Football Federation (NFF) says it plans to offer Ikeme a job when he completes his badge as a goalkeeper trainer.
He was an embodiment of absolute dedication, commitment and patriotic fervour in the games that he played for the Super EaglesMohammed SanusiNFF General Secretary
"The NFF will find the resources to send Carl Ikeme on a coaching course, and afterwards absorb him into the technical crew of the Super Eagles," NFF general secretary, Mohammed Sanusi, said in a statement.
"That is the least we can do for such a dedicated patriot.
"He was an embodiment of absolute dedication, commitment and patriotic fervour in the games that he played for the Super Eagles.
"The circumstances of his retirement from the game are somewhat depressing, even as we thank God for his life," Sanusi added.
Ikeme has become a much loved figure in Nigeria since stepping in as first choice goalkeeper following the retirement of the country's then captain and most-capped international, Vincent Enyeama.
Born in Sutton Coldfield, eligible for both England and Nigeria, Ikeme opted for the Super Eagles and earned a call-up in August 2015.
He made his debut in a 2017 Africa Cup of Nations qualifier against Tanzania in September 2015 and made eight more appearances for the three-time African champions, who honoured him at this summer's World Cup by naming him as their 24th squad member.
The Super Eagles were knocked out at the group stage in Russia and before the tournament their coach Gernot Rohr said: "My biggest regret is the absence of Carl."
Source: BBC Sport