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The 37-year-old won 128 caps for Denmark in an illustrious international career including playing an instrumental role in his country's surprise European Championship success in 1992.
The former Manchester United
stopper admitted that it was a hard decision for him to take but that he wanted
to give his all to the Portuguese champions where he is contracted to until
2002.
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"After nearly 14 fantastic and eventful years as a Danish international I have sadly taken the decision to end my international career," said Schmeichel.
Schmeichel's decision to step down as international number one is set to open the door for Sunderland stopper Thomas Sorensen to claim his place as the side's first choice goalkeeper.