The Swede left Japanese outfit Shimizu S-Pulse by mutual consent in February and a period of inactivity has persuaded him to hang up his boots.
"It's correct that Fredrik has taken the decision to quit," his press officer Lili Assefa told Swedish TV channel SVT. "I got the decision on Wednesday."
Ljungberg was an integral part of the Gunners' legendary Invincibles team of 2003-2004 and spent a season with West Ham United following his release from the club.
After only seven appearances for the Hoops, Ljungberg then made the move to Japan, where he featured eight times.
Ljungberg, who won 75 caps for his country, is now on Arsenal's coaching staff.