The 28-year-old Goldthwaite appeared in 91 MLS matches during his career with the San Jose Earthquakes, Houston Dynamo, Toronto FC, New York Red Bulls and Portland, scoring four goals with five assists.
"After a long, unbelievable journey, I have decided to call it a career," said Goldthwaite. "I am happy that when I look back on my career, I have zero regrets. I would like to thank all the fans in Portland and all the other cities I was lucky enough to play in for everything they have done in supporting me and my teammates."
Goldthwaite was a member of Houston's 2006 MLS Cup championship team while also helping New York reach the MLS Cup final in 2008.
Injuries have been an issue in recent years for Goldthwaite as he missed the end of the 2009 season with New York as well as most of the 2010 campaign because of injury problems.
Goldthwaite's 2011 season came to an end on July 16 after sustaining a knee injury against the Chicago Fire.
"I have known Kevin for a number of years and we've shared some great times together, including winning a championship with Houston," said Timbers head coach John Spencer. "It's always sad when a player's career comes to an end, but I wish Kevin the very best."