"I feel happy when I look back at my career," Diaw said in French. "I did what I had to do. And I don't see this as a retirement but the beginning of a new life."
Diaw, 36, hasn't played in the NBA since the 2016-17 season, when he was with the Utah Jazz. He played last season in France, for the Levallois Metropolitans.
He was named the NBA's Most Improved Player after the 2005-06 season, when he averaged a career-best 13.3 points, 6.9 rebounds and 6.2 assists per game for the Suns.
He won an NBA championship with the Spurs in 2014 when he averaged 9.2 points, 4.8 rebounds and 3.4 assists in 23 playoff games.
The Hawks selected Diaw with the 21st overall pick in the 2003 draft.