Greece's involvement in the tournament came to a dramatic end in Sunday's last-16 clash as 10-man Costa Rica claimed victory in a penalty shoot-out after extra time finished with the scores level at 1-1.
The defeat marked the end of a historic tournament for Greece in which they qualified for the knockout stages of a World Cup for the first time.
And midfielder Karagounis has now revealed that the game will be his last for the national team, bringing the 37-year-old's storied international career to a conclusion.
"This was my last game for Greece," Karagounis said.
"We wanted to stay in Brazil another week or even longer but you can't change it now."
Karagounis won 139 caps and was part of the Greece side that claimed a stunning victory at the 2004 UEFA European Championship.
But the former Inter, Benfica and Fulham man says he is now moving aside for the next generation of players.
"The national team has grown up, younger players have won invaluable experience," he added.
"This is no small thing and as we helped the team come of age we hope it will continue to be as successful in the future."