"This is the right time," said Gordon, 43, who's entering his 23rd full season in NASCAR's Sprint Cup Series.
Driving his No. 24 Chevrolet, Gordon has won four Cup championships (the last in 2001) and 92 races, third on the all-time list behind Richard Petty (200 wins) and David Pearson (105). Gordon's career Cup purse winnings total $145 million.
Gordon said he reached the decision midway through last season — a year in which Forbes estimated Gordon earned $18.7 million in salary and endorsements — after consulting with his longtime car owner, Rick Hendrick.
He then made a strong run toward winning a fifth title last season, following some lean years in which he struggled, which Gordon said convinced him this season should be his last.
"I always said I wanted to step away on my own terms if possible," Gordon told reporters on a conference call. "I thought we had a chance to [win the title] last year and I'd love to get to that same position."
Gordon declined to use the word "retirement" because he might occasionally get back in a race car. But Gordon said he wouldn't consider even a part-time ride because, among other things, he wants to spend more time with his wife and two young children.
"He's been an icon in our sport," Hendrick told reporters. "It's going to be really awkward and strange when I walk into the garage area and I don't see him sitting in the 24 car."
Gordon played a key role in NASCAR's expansion, starting in the 1990s, from its mostly Southern base to a nationally popular sport that's now watched by several million viewers each weekend.
When Gordon reached the Cup series in late 1992 at age 21, many of NASCAR's leading drivers — Petty,
Gordon was different. He was born in Vallejo, Calif., and spent much of his teens in Pittsboro, Ind., not far from the Indianapolis Motor Speedway. Once he started racing, the good-looking and extremely talented driver drew the ire of NASCAR fans as he began repeatedly defeating the veterans.
The late Earnhardt, who is tied with Petty for the most Cup titles with seven and had a steely reputation as "The Intimidator," gave Gordon a somewhat derisive nickname: "Wonder Boy."
But on Thursday, Earnhardt's son
"'This kid is gonna be special,'" the younger Earnhardt remembered his dad saying of Gordon.
As Gordon's wins mounted over the years and NASCAR's popularity grew, so did Gordon's standing with fans. Gordon's reach also was helped by his appearances on "Saturday Night Live" and morning talk shows and his considerable time with charitable efforts.
The Make-A-Wish Foundation, for instance, said Gordon has granted more than 245 wishes for children with life-threatening medical conditions who wanted to meet him, one of the foundation's top five wish grantors.
And though Gordon said he wants to focus on racing this year, he's likely to have the biggest sendoff during the Cup series' 36-race season since Petty's in 1992.
Coincidentally, Petty's final race in 1992 was Gordon's first in the series, a race that was a passing of the torch for NASCAR. This season's opening race is the Daytona 500, a race Gordon has won three times, on Feb. 22.