Ferguson has had a career the like of which will never be seen again. He won his 49th trophy in United's 20th league championship.
Blatter, who gave Ferguson with a lifetime achievement award last year, said on Twitter: "Just heard Sir Alex Ferguson is retiring at end of season. His achievements in the game place him without doubt as one of the 'greats'."
UEFA president Michel Platini hailed Ferguson as "a true visionary", and added: "Sir Alex has made a massive contribution to football, not only in Scotland and in England, but across Europe and beyond.
"His dedication, his attention to detail and his unique eye for talent, as both the manager of Manchester United FC and Aberdeen FC, has brought rich rewards over a 30-year period. His CV is almost unique in a results-based profession that normally focuses on short-term solutions rather than long-term vision.
"He is a true visionary and I hope that, having helped us in the past through various coaching initiatives, he will continue to collaborate with UEFA to share his fantastic knowledge with the next generation of up-and-coming European coaches who all wish to emulate his achievements in the sport."
Sports minister Hugh Robertson also paid tribute, saying: "Sir Alex Ferguson is one of the greatest British managers of all time and has been an incredible servant to Manchester United, bringing the club unprecedented success domestically and in Europe. His enthusiasm for our national game is boundless and I congratulate him on a remarkable managerial career."
Former United midfielder Lou Macari was shocked by Wednesday morning's announcement and acknowledged Ferguson's successor would have a difficult act to follow.
The Scot, now a pundit for MUTV, told the club's television channel: "It really has caught me by surprise this morning. My phone kept ringing all morning and I thought it must be something serious. When the news comes through, it's about the manager... which is serious if you're a Manchester United supporter.
"Everybody will be a little bit concerned. Can the next guy coming through the door do what Sir Alex has done? That's going to be tough."
Source: PA
Source: PA