Brady, 45, first announced his retirement on this day last year but reversed his decision six weeks later, claiming he had "unfinished business".
He won six Super Bowls with the New England Patriots and one with the Tampa Bay Buccaneers in 2021.
Brady's final season ended in the Bucs' 31-14 play-off defeat last month.
"I'm retiring - for good," he said in an emotional video posted on social media. "I know the process was a pretty big deal last time, so when I woke up this morning I figured I'd just press record and let you guys know first.
"It won't be long-winded. You only get one super emotional retirement essay and I used mine up last year.
After being selected by the Patriots with the 199th pick of the 2000 draft, Brady led the franchise to six Super Bowl titles.
He left for the Bucs in 2020 and helped them win the title in his first season, being named the game's Most Valuable Player (MVP) for a fifth time.
After returning to the game last March, Brady - a three-time NFL season MVP - posted the first losing record of his career in a difficult year on and off the field.
Away from the sport, Brady and his wife of 13 years Gisele Bundchen announced their divorce in October after months of rumours.
Brady - heralded as American football's GOAT (greatest of all time) - led his team to the play-offs in 20 of his 21 seasons as a starter.
He is the NFL's all-time regular-season leader in pass attempts (12,050), completions (7,753), passing yards (89,214) and touchdown passes (649), as well as being the league's leader in all four categories in the post-season.
In 2015 Brady was given a four-game suspension for allegedly colluding to deflate balls during a play-off game, but the ban was overturned after a United States judge ruled it had "legal deficiencies", allowing him to play the entire 2015-16 season.
It was reinstated for the start of 2016 and he missed the first four games of the campaign.
The 2022-23 season was expected to be Brady's last, at least with the Bucs - he had been linked with the Las Vegas Raiders, Tennessee Titans, San Francisco 49ers and Miami Dolphins.
Last March Brady agreed a 10-year contract worth a reported $582m to become Fox Sports' lead NFL analyst once he retired.