Thomas had agreed a one-year contract with Super League outfit Wigan, but the 37-year-old will not now be linking up with his former Crusaders coach Iestyn Harris, who will be the Warriors' assistant boss next season.
Emanuele Palladino from Thomas' management company Distinct said: "We can confirm that Gareth Thomas is officially retiring from both international and club rugby with immediate effect.
"This marks the end of what has been a remarkable career for a remarkable person.
"Gareth hopes that through his achievements both on and off the field he has left a lasting legacy within the game."
Thomas, 37, added: "I have listened and discussed this decision with many of my family and close friends. My mind has told me that the time to retire is now.
"If you can't give 100 percent to rugby then you can't do it justice. This is a sad day, but I know that my time has come to an end as a player. My passion for the amazing game will never end or leave me however.
"I do not know what lies ahead, but I feel the challenge of something different excites me more than another year of rugby.
"I would like to thank everyone I have been involved with in the sport. I could not have achieved it without any of them. I have great memories and great friends that I will keep for the rest of my life.
"I leave knowing I have done everything in my power to be the best person and player I could have ever been. And finally, I thank my parents for all their support and help throughout my career.
Harris said : "I've worked with Gareth for just under two years and the work and desire that he put into his transition from Union to League was a testament to his supreme professionalism.
"Even though he switched at a mature age his enthusiasm for information made his switch a huge success.
"Gareth's honesty and reasoning behind his decision were unselfish, it would have been easy for him to play the Wales internationals for his personal gain but he didn't want to take an opportunity off somebody else in our squad.
"I'm sure Alfie will be a huge success in whatever comes next in his life's journey, he certainly has the best wishes of myself and everybody involved in Wales Rugby League."
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