A veteran of over 350 matches in the English Premier League with Sunderland, Aston Villa and Stoke City, Sørensen played 101 times for the Danish national team.
The 41-year-old ends his career after two seasons with Melbourne City in Australia's A-League, where he was named the league's goalkeeper of the year in his first season.
"It was a very challenging decision, but after reflecting on my career and my achievements to this point, I knew the time was right, both mentally and physically," Sørensen said in a statement.
"I've been in a privileged position to play the game I love and enjoy a career of over 20 years, which has included many highlights and I will look back on my career very fondly."
Sørensen's focus will now shift to cycling as he organises the "Ride for Kids" -- a 3,500 kilometre (2,175 mile) bike ride in February next year in Australia to raise money for a children's charity.
Clockwise from top left: Sørensen arriving in Busan, South Korea for the 2002 World Cup; the goalkeeper during his Stoke City days; with Danish goalkeeping legend Peter Schmeichel in 1999. Photos (clockwise from top left): Scanpix Denmark;Glyn Kirk/Scanpix;Lars Møller/Scanpix.