The 39-year-old has established himself as one of the greatest quarterbacks that the NFL has ever seen, setting numerous records during his glittering career, including being named MVP on an unprecedented five occasions.
The announcement of his retirement has been expected after a season in which he struggled to hit his usual heights, but still managed to help the Broncos to the Super Bowl crown.
He will now retire at the top of the game having picked up his second title in his 18-year career with a surprise 24-10 victory over the Carolina Panthers at Super Bowl 50.
Manning is the only quarterback in NFL history to have led two different franchises to Super Bowl glory, having also steered the Indianapolis Colts to the title nine years earlier.
"When you look at everything Peyton has accomplished as a player and person, it's easy to see how fortunate we've been to have him on our team," Broncos general manager John Elway said in a statement.
"Peyton was everything that we thought he was and even more -- not only for the football team but in the community. I'm very thankful Peyton chose to play for the Denver Broncos, and I congratulate him on his Hall of Fame career."
Manning, who will make the official announcement of his retirement on Monday, leaves the game as the all-time leader in regular-season touchdown passes (539), yards (71,940) and tied with Brett Favre for 186 wins, although that jumps to a record 200 victories including playoff games.