Baltacha broke into the world top 50 in 2010 and has enjoyed victories over a number of top players including Li Na and Francesca Schiavone.
The 30-year-old reached the third round of the Australian Open on two occasions as well as the same stage of Wimbledon, in 2002, and was also a regular in Britain's Fed Cup team.
But having struggled for form and fitness in recent years, she has decided to retire to open a tennis academy with her coach Nino Severino.
"It just feels it's the right time" Baltacha told the Lawn Tennis Association's (LTA) official website.
"My body has taken such a bruising over the last 16 years and that's finally taken its toll.
"I have had some amazing experiences through playing tennis and I wouldn't change any of them but now my mind and my body are telling me it's time to move on to a new phase of my life.