Peyton Manning Fights Back Tears -- I'm Done in Indy

Peyton Manning and Indianapolis Colts owner Jim Irsay have made it official ... Manning's playing days in Indy are over ... but the team plans to RETIRE Manning's #18 jersey, stat.

Fighting back tears ... an extremely emotional Peyton addressed Colts fans ... saying, "Thank you very much from the bottom of my heart, I truly have enjoyed being your quarterback."

Peyton -- who's been plagued with neck injuries -- said he's confident he'll play in the NFL again ... but says he hasn't thought about which team he'll join next.

Manning talked about his recovery ... saying, "I've got some progress to make ... but I've come a long way. I really enjoy being back out there."

Irsay -- who was equally emotional and also battled tears -- explained his decision to cut Peyton by saying, "[The Colts are] rebuilding a team with a salary cap problem."

Peyton was due to make a $28 million bonus with the Colts tomorrow as part of a 5-year $90 million deal -- but Irsay decided to release him before the payout.

Still, Irsay made it clear ... "The 18 jersey will never be worn again by a Colt on the field."

He continued, "We're here very much as well to honor all the incredible memories and incredible things that he's done for the franchise ... for the city ... for the state ... I can't thank [Peyton] enough."