For months, the California Democrat had faced questions about alleged memory and cognitive issues.
In April, she was admitted to hospital after a “minor fall” at her home, the latest in a series of health concerns.
In a statement made after she announced her retirement plans, US President Joe Biden called her a “passionate defender of civil liberties” with a “strong voice for national security policies that keep us safe while honouring our values”.
“I’ve served with more US Senators than just about anyone,” Mr Biden said. “I can honestly say that Dianne Feinstein is one of the very best.”
Earlier this year, she was absent from Capitol Hill for nearly three months following a case of shingles. She took on lighter duties upon her return and moved around the US Capitol using a wheelchair. She sometimes displayed confusion during interviews, and in committee hearings or floor votes.
Ms Feinstein was well known as a vocal advocate for gun control measures, and an ardent supporter of the assault weapons ban signed into law by President Bill Clinton in 1994.
Earlier in life, she became San Francisco’s mayor after her predecessor, George Mascone, and supervisor Harvey Milk were killed by a former supervisor.
She later recounted rushing to Mr Mascone’s office and finding a bullet wound as she searched for his pulse – an experience she said left an indelible impression on her.
“The CIA’s actions are a stain on our values and our history,” she said at the time, adding that “history will judge us by our commitment to a just society governed by law and a willingness to face an ugly truth and say ‘never again'”.
The review ultimately led to legislation barring the use of “enhanced interrogation techniques” such as waterboarding on terrorism suspects.
Ms Feinstein was also the first woman to sit on the Senate Judiciary Committee, and first female chair of the Senate Intelligence Committee.
In a 2017 interview with CNN, she said that “being a woman in our society even today is difficult”.
“I know it in the political arena,” she said. “We went from two women senators when I ran for office in 1992 to 24 today – and I know that number will keep climbing.”