The surprise move came after a season in which Favre broke a number of NFL records, was named to the Pro Bowl, and led the Packers to the NFC Championship Game.
Packers coach Mike McCarthy said that he spoke with Favre last night while he was at his daughter's basketball banquet in Austin, Texas, and the news took him by surprise as well.
"We went through all the different scenarios, pros and cons, just a lot of daily detail things, things we could possibly change to help him. But the thing it really kept coming back to is physically he's feeling better, but ... mentally tired was the constant," McCarthy said. "I was surprised last night when he told me, no question. I was actually walking into my daughter's basketball banquet, and I had to remove myself from where I was standing, because I was taken back. But it's something he's given a lot of thought. Going off our Thursday conversation, it was something, the last words he left was he needs to dig deep in his heart and make the right decision."
The retirement was first reported by FOXSports.com's Jay Glazer on Tuesday morning.
"I know I can still play, but it's like I told my wife, I'm just tired mentally. I'm just tired," Favre said.
Favre's agent, Bus Cook, also learned of his decision Monday night.
"Nobody pushed Brett Favre out the door, but then nobody encouraged him not to go out that door, either," Cook told The Associated Press by phone from his Hattiesburg, Miss., office.
Packers general manager Ted Thompson thanked Favre for 16 years of wonderful memories with the team.
His accomplishments are legendary," Thompson said. "And it's the passion with which he played that made everyone a Brett Favre fan."
The team hasn't said when Favre might address the media.
Favre led the Packers to the NFC championship game in January, but his interception in overtime set up the New York Giants' winning field goal.
"If I felt like coming back — and Deanna (Favre's wife) and I talked about this — the only way for me to be successful would be to win a Super Bowl," Favre said. "To go to the Super Bowl and lose, would almost be worse than anything else. Anything less than a Super Bowl win would be unsuccessful."
Last season, Favre broke Dan Marino's career records for most touchdown passes and most yards passing and John Elway's record for most career victories by a starting quarterback.
He retires with 5,377 career completions in 8,758 attempts for 61,655 yards, 442 touchdowns and 288 interceptions.
"He was the prototypical gun-slinger type," said Marv Levy, Pro Football Hall of Fame coach. "He's the type of guy where, 'Oh, what's he throwing into that crowd for?' But he had intuition, toughness, resilience."
Hall of Fame quarterback Troy Aikman wondered if Favre's decision was final.
"As the season gets closer, I wouldn't be surprised at all if he changes his mind," said Aikman, a Fox analyst who played 12 years with the Dallas Cowboys.
The news stunned many.
"I was surprised when I heard it this morning," former Packers general manager Ron Wolf said. "He played with such a great passion. He must have figured he no longer had that passion, and it was time to get out."
Even Favre's teammates didn't see it coming.
"I just saw it come across the TV," Packers wide receiver Koren Robinson said, when reached on his cell phone by The Associated Press.
In his final season, Favre also extended his quarterback-record streak of consecutive regular-season starts to 253 games — illustrating his trademark toughness. Add the playoffs, and Favre's streak stands at 275.
"To me he's an ironman," seven-time Tour de France winner Lance Armstrong said after speaking at an anti-smoking rally in Wisconsin's capital. "He was around a long time. He played hard the whole time. He worked hard the whole time. He inspired and encouraged his team the whole time. He played through pain, he played through losses."
In the past several offseasons, Favre's indecision about his football future became a winter tradition in Wisconsin, with Cheeseheads hanging on his every word.
Unlike after the 2006 season — when Favre choked up in a television interview as he walked off the field in Chicago, only to return once again — nearly everyone assumed he would be back next season.
It was a remarkable turnaround from 2005, Favre's final season under former head coach Mike Sherman, when he threw a career-worst 29 interceptions as the Packers went 4-12.
Surrounded by an underrated group of wide receivers who proved hard to tackle after the catch, Favre had a career-high completion percentage of 66.5. He threw for 4,155 yards, 28 touchdowns and only 15 interceptions.
Before the Packers' Jan. 12 divisional playoff game against Seattle, Favre told his hometown newspaper that he wasn't approaching the game as if it would be his last and was more optimistic than in years past about returning.
"For the first time in three years, I haven't thought this could be my last game," Favre told the Biloxi (Miss.) Sun Herald. "I would like to continue longer."
But Favre finished the season on a sour note, struggling in subzero temperatures in a 23-20 overtime loss to the New York Giants in the NFC championship game.
Afterward, Favre was noncommittal on his future. McCarthy said he wanted Favre to take a step back from the season before making a decision.
Now he has decided to walk away.
"The Packers owe him a tremendous debt of gratitude," Thompson said in a statement. "The uniqueness of Brett Favre his personality, charisma and love of the game — undoubtedly will leave him as one of the enduring figures in NFL history."