"I'm finished, there will be no more," the 30-year-old said.
He is likely to be joined in retirement by his Celtic team-mate Johan Mjallby, although Sweden's captain is to give his position more thought while on holiday over the next few weeks rather than make any hasty announcement.
"
It's hard to leave the family at home for long periods, and the travelling is tough
"
Henrik Larsson
Larsson, who has two young children, said the demands of international football had become too great.
"I've been thinking about it for a while, and now my family must come first," he said.
Larsson will continue to play club football with Scottish champions Celtic.
He revealed his decision to his team-mates and coaches Lars Lagerback and Tommy Soderberg amid emotional dressing room scenes after the match in Oita.
As he shook hands with each squad member, he explained he did not want to stay on for the European championship in 2004.
"It's too far away to the next big event," said Larsson.
"It's hard to leave the family at home for long periods, and the travelling is tough."
Larsson put the Swedes ahead in Suwon, with his 30th goal in 72 internationals, but two goals - including a golden goal - from Henri Camara ended Sweden's World Cup campaign.
"We needed luck to get a goal," the Celtic forward said. "We had chances towards the end of the second half but we couldn't make them.
"However, this is a marvellous tournament to have played in. Although I am not happy, I am grateful to the Japanese supporters."