Monreal left Real Sociedad at the end of his contract after missing the 2021-2022 season due to injury.
The left-back, who won 22 caps for his country, on Wednesday (AEST) announced that his 16-year professional career is over.
He posted on Instagram: "Thirty-six years playing football, 16 as a professional. Squeezing my body and taking it to limits that I would never have imagined.
"My knee sends me a message… loud and clear; I cannot continue! Do I get mad? NO! I listen to it and accept the situation and thank it for everything.
"A stage is over. Another starts. I'm happy and feeling good. One more time… I FEEL GOOD!!! And that gives me peace of mind.
"Life is a gift and I like to be grateful. Thank you Osasuna, Spain, Malaga, Arsenal, Real Sociedad for letting me cross your paths. What good years…."
Monreal started his career at Osasuna and joined Malaga before spending over six years with Arsenal, winning the FA Cup three times with the Gunners.
He returned to his homeland with La Real in 2019 and lifted the Copa del Rey trophy the next year after a 1-0 victory over Athletic Bilbao.