"I am ending my career knowing that I am among the best in the world," she said in a statement.
"However, in the past weeks I have doubted whether I have the necessary motivation and energy for one, two or three years of battling for gold medals and championship titles."
The 29-year-old won the 50-metre and 100-metre freestyle at the 2008 Beijing Olympics and claimed the same two titles in world record time at the world championships the following year.
She failed, however, to win any medals at last year's London Olympics.
"Britta Steffen was an unusual swimmer. Her double success in Beijing and the world championships in 2009 will never be forgotten," said German swimming federation (DSV) President Christa Thiel.
"We would be delighted if Britta would remain part of swimming and the DSV in any function."
(Reporting by Karolos Grohmann, editing by Ed Osmond)
