Returning to the slopes last December after two seasons out, she achieved a best finish of only 42nd in three races.
"It has been an epic battle with my hip injury, and the past three years I have put everything into returning to competition at the highest level and reach my fifth Olympic Games," the 33-year-old said in a statement.
"Sadly, I haven’t found the progression to compete with the best in the world again, but I’m proud to have fought until the very end."
Mancuso will now be working with NBC television.
After an 18-year career, having made her World Cup debut as a 15-year-old in 1999, Mancuso bowed out on the piste where she claimed her first World Cup podium finish with second place in a super-G in January 2006.
She won Olympic giant slalom gold in Turin a month later.
Mancuso also won Olympic silver medals in downhill and the combined in Vancouver in 2010, adding a bronze in the combined in Sochi four years ago.
Her four Olympic medals are the most by a U.S. female Alpine ski or snowboard athlete.
Born with hip dysplasia, a misalignment of the bones, she underwent surgery in 2006 and 2015, missing two seasons before returning in St Moritz at the end of last year.
"I am happy that I got to ski my last race here in Cortina, one of my favourite stops on the tour," she said on Friday after skiing the Olimpia delle Tofane piste in a Wonder Woman suit.
Team mates including Lindsey Vonn sprayed her with champagne in the finish area.
"I had my first podium here, and now I get to say farewell," she said. "I’m excited to see where skiing and life’s adventure will take me next."
(Reporting by Alan Baldwin; Editing by David Goodman)
