Diedhiou, 45, a Senegalese customs inspector, was involved in four matches at the recent World Cup in Russia.
He was in charge of the Group games between Costa Rica and Serbia and then hosts Russia against Uruguay, and the knockout match between Belgium and Japan.
His final assignment was as the fourth official for the third place play-off between Belgium and England,
“I could have continued and push on until the 2019 Nations Cup, but our association would have struggled to prepare the next generation,” he said.
“By retiring now, it gives our referee body an opportunity to prepare a younger person who is ready to officiate at the next African Cup of Nations.
“It is a sacrifice that will be beneficial to the Senegalese referee association, which can count on young referees with great qualities.
“Personally, some people gave me the opportunity to officiate, so it’s time to do the same by passing the baton.”
Diedhiou has been an international referee since 2008, and he also took part in the CAF Champions League qualifiers a year later, then moved onto the Africa Cup of Nations duty in 2012.
Four years later he was handed group stage games at the 2016 Olympic Games in Rio.
He served as a Video Assistant Referee (VAR) official at the 2017 Fifa Confederations Cup in Russia, alongside Gambia’s Bakary Papa Gassama, before he was named as one of six African referees to officiate at the 2018 World Cup