The 34-year-old was used judiciously by manager Brendan Rodgers last season, making 34 Barclays Premier League appearances, only one of which was as a substitute.
With the additional demands of Europe's elite club competition -which Gerrard helped Liverpool win in 2005 - for the first time in five years, England's third-highest appearance maker has decided now is a good time to bow out.
"Obviously, I have to look after my body as much as possible to ensure I can give everything when I take to the field," said the midfielder who, with 114 caps, is only behind goalkeeper Peter Shilton (124) and David Beckham (115).
"To ensure I can keep playing to a high level and giving everything to Liverpool Football Club I believe this is the right decision, and having Champions League football back at Anfield is another big factor"
Gerrard may be criticised by some for putting club before country but there will be as many, if not more, who will feel now is the time for him to step down from the English national team.
England exited the World Cup in Brazil after just two matches and Roy Hodgson had a degree of rebuilding to do regardless, but would probably have wanted Gerrard to stay on a while longer to ease the transition.
"While I'm disappointed in the decision I can entirely understand Steven's situation and can have no complaints given the incredible service he has given to his country," Hodgson said. "He is an incredible man and a fantastic footballer who we have all been blessed to see in an England shirt so often. It is never by coincidence that people reach such a staggering figure as 114 caps, it is a mark of his wonderful talent allied to a huge drive and determination to live up to the highest standard.
"We shall miss his leadership qualities as we look ahead to the qualification campaign with a youthful group of players. I wish him all the best in the future."
Gerrard put a lot of thought into his decision after a disappointing World Cup, calling his international retirement one of the hardest decisions of his career.
"I have agonised over this since coming back from Brazil and have spoken to family, friends and people close to me in the game before coming to this point," he said. "I'd like to firstly thank my family and friends for all their support. I'd also like to thank everyone who has been part of my international career, from the England managers I've played under to the staff at the FA and, of course, all the players I've been fortunate to play alongside.
"In particular, the supporters have been amazing, not least in Brazil when they got behind the team despite the disappointing results. I'd especially like to thank Roy [Hodgson], firstly for giving me the captaincy permanently when he took the job, making me the proudest man in the country and allowing me to fulfil my childhood dream."