In a statement issued over the weekend she said: "I deeply regret my comments I made last week regarding the Israelis and the Palestinians. They do not reflect my heart-felt belief that peace will come to the Middle East only when all parties recognise the need for mutual respect and tolerance. May that day come soon."
The controversy prompted Thomas to be dropped by her public speaking agency and also led to the cancellation of her plans to deliver a high school commencement address in suburban Washington.
"Helen Thomas announced Monday that she is retiring, effective immediately," Hearst News Service reported. "Her decision came after her controversial comments about Israel and the Palestinians were captured on videotape and widely disseminated on the Internet."
Thomas was absent from Monday's White House briefing, where she has a reserved seat in the centre of the front row.
The White House Correspondents Association called her remarks "indefensible" and, before the announcement of her retirement, scheduled a meeting on whether an opinion columnist should have a front-row seat in the West Wing briefing room.
"Many in our profession who have known Helen for years were saddened by the comments, which were especially unfortunate in light of her role as a trail blazer on the White House beat," the association's board said in a statement.
Thomas became a columnist for the Hearst newspaper chain in recent years after working for decades as a White House correspondent for United Press International.