The Juventus striker, 32, scored the winning goal in his country's semi-final win over England in Russia.
Mandzukic then scored an own goal and one for his team in the 4-2 final defeat to France.
With 89 caps to his name, Mandzukic said he had finally agreed to make the "impossible decision".
He said: "As much as the silver fills me with new energy, it makes it easier to make this impossible decision.
"This month, as well as the arrival home, will remain the most important memory of my career.
"It was the most beautiful trip.
"I am overjoyed, filled with heaven, proud of the silver we have been fighting for for years, through a lot of effort, disappointment, and heavy moments.
"There is no ideal time to go.
"If we can, I believe that we all would play for Croatia so long as we're still alive because there is no greater pride.
"But I feel that the moment is for me now."
The forward scored 33 goals during his international career.
That placed him second on the all-time list behind Davor Suker.
Source: Read Full Article