The 31-year-old British team captain, who pulled out of the World Championships here on Wednesday because of injury, took her decision during a phone call with her husband, Jon Bigg, on Wednesday night.
Her statement followed Tessa Sanderson's confirmation that, having failed to qualify for Saturday's javelin final, she was ending her career at the age of 41.
Thus, in the space of three hours, British athletics had said goodbye to two of its greatest female competitors.
Gunnell - who in 1994 held a grand slam of Olympic, world, Commonwealth and European titles - said she simply cannot face going on after three consecutive years of injury problems.
She was unable to defend her world 400 metres hurdles title in 1995, and was carried from the Olympic track in tears last year after breaking down in her semi-final.
"I always said after Atlanta, didn't I, that if I was injured any more I would call it a day. The luck had run out," she said yesterday, her left calf heavily strapped.
"When I spoke to Jon, I had made my mind up before I put down the phone. He's always said the decision was up to me and he would support me whatever I did. But I think he felt he couldn't go through it one more time.
"When I first told him I had got another injury, he was very frustrated. He was the one who was swearing, and saying he couldn't believe it had happened to me again."
Having won her opening 400m hurdles heat in 54.54sec, her best time of the year, Gunnell became aware of a problem in her left calf. "I thought as I walked off, `What's going on here? I don't deserve this.'
"In some ways now I feel a little bit of a relief. Everyone has been asking me when I was going to call it a day, and I worried whether it would be obvious to me. But it was.
"I slept on my decision overnight because I wanted to make sure I wasn't going to turn round in six months' time and say, `Oh, hi everybody, I'm going to come back.
"In the bar the other night, Steve Smith and Allison Curbishley and some of the others were saying, `You can't retire. You've got to come with us to the Commonwealths and Europeans next year.
"If I'd done myself justice here, maybe I would have thought about it. But it's time to call it a day."
Gunnell hopes to be fit in time for farewell appearances at Crystal Palace on 17 August and Gateshead on 7 September.
After that, Gunnell will have other things on her mind. "The pressure's all on Jon now," she said with a grin. "He's got to support me and get me pregnant."
Unlike Linford Christie, she will not continue to compete in club athletics after putting an end to her international career. "No," she said. "End of story. The thought of going out and doing another winter's training after this... I couldn't do it."
Sanderson was equally adamant that she would not be tempted to prolong a career which has earned her Olympic and Commonwealth titles. The suggestion that she might try to improve on her record of being first British Olympian to appear in six Games brought a gust of laughter.
"That's it," she said. "That's the end of it."
Her effort of 57.84m missed qualifying by just over three metres. "When I picked up the javelin for my last throw, I felt really choked, but I didn't want to cry. When I saw the British supporters afterwards, and they were still saying well done and thanks for everything, that's when I felt tearful."
Her mood was altered when she was called for a routine doping test - the last of a 23-year-international career. Character- istically, she was able to see the funny side.
"I thought, `Give me a break. I'm 41 years old - where am I running to?' Even when I sat on the toilet I was thinking, `Here we go. One last dip'."