The 29-year-old had been out of action for more than a year, failing to find a club after he was released by Tottenham at the end of the 2012-13 season.
He admitted last month that his time in football was coming to a close, and confirmed that on Friday morning in an, at times emotional, interview with Sky Sports News.
Bentley started his career as a teenager with Arsenal and had spells on loan with Norwich and Blackburn, who he joined in 2006 on a permanent basis, scoring a hat-trick in his first game.
Tottenham spent £15m to bring him back to north London in 2008 but he managed only 42 Premier League appearances and spent further loan spells with Birmingham City, West Ham, Russian side FC Rostov before a return to Blackburn, where he played his final professional games at the end of the 2012/13 season.
He retires after a total of 266 club appearances and he also played for England at all levels from U15 upwards, including seven appearances for the senior team between 2007 and 2008.
Bentley said: "I've given up football. It's over a year since I played my last game and I've taken the decision to take my life in a different direction. I felt like it was time to call it a day.
"I've just had little baby twins, three months old, and I've got a little four-year-old and I want to focus on that. My love for the game went a little bit and I didn't want to carry on just for the fact of paying me money.
"It's not really ever been an option for me to do that. I'm involved in a restaurant in Spain and we're bringing it to the UK, so there is a lot of work there.
"I enjoyed every minute of it and had a smile on my face every day but I don't want to carry on playing somewhere just for money, taking my family to a place we really don't want to be. Life's too short to do that.
"I've just fallen out of love with the game. I had a bit of a difficult time at Tottenham and it's just one of them things. It's probably a little bit early but it's where I am at now.
"It's a positive decision in my life and I am only viewing it as positive. I'm happy.
"I have no regrets. I loved every minute of playing but the game has changed. When I first started it was the enjoyment, going in to work every day was brilliant.
"Now it's a little bit robotic, the social media side of it, the money that has come into the game. I hate to say it, but it's made it boring and predictable - calculated - and to go and sign another three or four years into that wasn't really an option for me."