All Essendon players were in attendance when Lucas, 31, and coach Matthew Knights made the announcement at Windy Hill on Tuesday, two days after the Bombers' inspiring two-point win over St Kilda.
Lucas initially joked he was extending his career until at least 2012 but after feigning that a new three-year deal had been signed with the club, he came clean.
"I'm here to announce I'm retiring which is no great surprise, and that decision is effective immediately."
He said a number of discussions with Knights throughout the season had contributed to the decision, but stressed that he knew within himself that the time was right.
"[Cricketer] Adam Gilchrist said a couple of years ago [when he retired]: 'you just know'.
"I found that a remarkable comment at the time, but now I firmly believe in that – you just do know. It's the little things, and the big thing is that you can't do what you have in the past."
Not being able to replicate past form was one of a combination of factors Lucas attributed his retirement to and also spoke of the state of his body, his mental attitude and where the club was heading.
He said the Bombers' finals prospects dictated the timing of the announcement, even though he had come to a decision on his future mid-season.
"Even earlier in the year, I had a firm belief in my mind that this would be my last year," he said
"Things always change; things turn around, but nothing has changed in the way I know this decision is right."
He hangs up his boots with 270 AFL games to his name after making his debut in the second-ever Anzac Day clash with Collingwood in round five, 1996.
Lucas played 14 games this year after starting the season with limited preparation owing to a knee operation at the end of the 2008 season.
He played the first six games of the year, but after going goalless in rounds four to six, was dropped to the Bombers' VFL side for four games before earning a round-11 recall.
His last game in the seniors was in round 18 against West Coast, where he failed to kick a goal for the fifth time this year.
He has missed the past two weeks with knee soreness.
The equal club best and fairest from 2003 kicked 471 goals across his career and was a member of the 2000 premiership side, a season he said was his most enjoyable football.
He also expressed his desire to stay involved in football although he was unsure at this stage in what capacity.
