Scholes previously retired at the end of the 2010-11 season before making a shock return in January 2012.
But the 66-cap England hero said: "I retired before and came back. I just felt that I still had a bit of fire left inside me. But this time it is over for good. The knee injury has been a real problem this season and I wasn't really up to speed at times.
"I know this is the right time. I am looking forward to the next stage of my career. I was pleased to retire when I did because I was overshadowed by bigger names bowing out at the same time.
"I got out under the radar."