The 34-year-old, who played 127 times for his country in a career spanning 13 years, is the third most-capped player in Red Devils history.
Former Tottenham and Atletico Madrid centre-back Alderweireld represented Belgium at five consecutive major tournaments, including three World Cups and two European Championships, and was a member of the squad that finished third at Russia 2018.
But following a disappointing group stage exit in Qatar last year, he has now become the latest experienced member of their squad to call time on his international career.
"As a little boy, I dreamed of playing for the national team," Alderweireld told the Belgium national team's official website. "I am very grateful and proud that this dream has become a reality.
"I can look back, 14 years later, on 127 international matches, three World Cups, two European Championships and countless beautiful memories.
"With pain in my heart, I announce that I will retire from the Red Devils with immediate effect I have given myself completely, physically and mentally.
"I want to thank all my team-mates and the staff for the unforgettable moments we shared together. Without them, none of this would have been possible."
Alderweireld made his debut in 2009 during a 1-1 draw with Chile, though he did not become a regular until 2013.
He subsequently was a member of their squad at the Brazil 2014, Russia 2018 and Qatar 2022 World Cups, as well as Euro 2016 and Euro 2020.
His retirement follows team-mate Eden Hazard's decision to bow out following their disappointing Qatar campaign.
Belgium will play their first games under new coach Domenico Tedesco later this month, with a Euro 2024 qualifier against Sweden and a friendly against Germany.
Manchester City playmaker De Bruyne, who was named PFA Player of the Year earlier on Tuesday, helped Belgium to a 5-1 victory in which Michy Batshuayi scored twice.
De Bruyne missed Saturday's 2-0 win against Denmark to be at the birth of Suri, his third child with wife Michele.
De Bruyne was back on duty for his country as they made it six points from two games in Group A2, helping Belgium recover from shipping an early goal to Holmbert Fridjonsson.
Man of the match Batshuayi's double and goals from Axel Witsel, Dries Mertens and 18-year-old Jeremy Doku allowed Belgium to cruise to an ultimately impressive win behind closed doors in Brussels.
"It was a great night for us. I am happy to be back on the pitch," De Bruyne said, quoted on UEFA.com.
"I don't think my newborn daughter will have seen the game tonight, but I can't wait to be back with her and my wife and kids."
Speaking to Belgian broadcaster RTBF, De Bruyne said Belgium were given problems by the team that lost 1-0 to England on Saturday.
"Iceland played with a compact block. It was complicated to find the solution at the start of the match," he said.
"But that did not surprise me given the match this team played against England.
"It's good to win two matches in these conditions because not everyone has participated in the same number of training sessions before joining the squad. I think we played well at times."
Toby Alderweireld completed a century of Belgium appearances in a largely empty King Baudouin Stadium.
"A 100th game without an audience, it's a shame," said the Tottenham defender. "I would have liked my family to be there, but I'm happy to have reached this bar."
Iceland head coach Erik Hamren, quoted by UEFA.com, said: "We need to face the fact that they are a better team than us. We had neither the energy nor strength to defend for each other throughout the game."
And while his Belgium counterpart Roberto Martinez admitted the visitors made life "complicated" early on, the Spaniard added: "After this delicate moment, we managed to find a way to hurt them."
