The Seahawks announced Rice's decision two days before the start of training camp. The news was first reported by Pro Football Talk.
Rice played seven seasons and is retiring at age 27.
"I have enjoyed my experiences with all of my coaches, teammates and passionate Seahawks fans. I take great pride in knowing I was one of the players signed to help build the foundation of the team that ultimately won the Super Bowl," Rice said in a statement from the team.
"I'll be joining the 12s in support of the Seattle Seahawks as they take on the challenge to repeat."
Rice missed half of last season with the Seahawks after tearing his ACL against St. Louis. Rice re-signed with Seattle in the offseason on a $1 million, one-year deal. But he was going to be pushed to make the Seahawks' final roster with the additions of draft picks Paul Richardson and Kevin Norwood and a healthy Percy Harvin.
"The entire organization would like to thank Sidney for his leadership over the past three seasons," Seattle general manager John Schneider said. "His time as a Seahawks player displayed the core values that Pete and I aimed to bring to the program."
Rice signed with Seattle as a free agent before the 2011 season. He played in 33 regular-season games with the Seahawks, his best season coming in 2012 when he had 50 receptions and seven touchdowns and played all 16 games.
Rice's best season came in 2009 when he was selected to the Pro Bowl after catching 83 passes for 1,312 yards and eight touchdowns. He added another 10 catches and four touchdowns in the playoffs that season.
But injuries were always part of the story with Rice. His breakout season with Minnesota in 2009 was followed by hip surgery that limited him to six games in 2010, his final season with the Vikings.
His first season with Seattle was shortened by a pair of concussions that eventually landed Rice on injured reserve. Rice started six of Seattle's first eight games last season before injuring his knee against the Rams.
Rice was a second-round pick of the Vikings in 2007. He'll finish his career with 243 catches and 30 touchdowns.
Wide receiver is one position where the Seahawks could afford to absorb a loss. Golden Tate left for Detroit in free agency in the offseason, but Seattle was not counting on Rice to be a starter with Harvin, Doug Baldwin, Jermaine Kearse and Ricardo Lockette all returning off the Super Bowl roster.
Rice recently invested in Wingstop franchises in the Puget Sound region and said he intends on establishing himself as a businessman.