SPOILER WARNING: This article contains major spoilers for "You Have Saved This City," the Arrow Season 7 finale.
It's official: Felicity Smoak has retired from Team Arrow. In "You Have Saved This City," the Arrow Season 7 finale, both Felicity and Oliver were forced to step down from the team after Emiko's machinations threatened their lives and that of their unborn daughter Mia.
In her quest for revenge, Emiko sought to destroy Star City and end the lives of those Oliver loves most. As such, she enacted a plan that was already in motion at the time of her death. By then, however, Emiko had undergone a change of heart; she asked Oliver's forgiveness and revealed her deadly intentions: "You need to hide. Your family is going to die. I made sure of it. You need to hide Felicity and the baby."
Oliver took Emiko's warning very seriously. As the team concluded their mission, Felicity made the announcement. "We're stepping back," Oliver revealed. "We're leaving Star City. Not forever, but for now."
"The fact that the city is safe is the reason why we can leave," Felicity added.
"I've spent a long time thinking about my legacy as the Green Arrow. I always hoped it would be saving the city, but now I know that my greatest legacy is this team," he told Diggle, Rene, Dinah and Roy. "I started this mission alone. I was certain that I would end it alone, but the truth of the matter is that every bit of success that I've had along the way is because of al of you. The city is safe because of your courage, your compassion, your selflessness and your loyalty."
This segued into the creation of the Mark of Four, which led William to find Roy on Lian Yu and kickstarted the events of the flash-forwards in the Season 7 premiere. Oliver and Felicity lingered in the bunker after the rest of the team had left. "It's the right thing to do for our family," she said.
"I do wish we could tell the team about the baby," he lamented. "But I understand it just puts them in the Ninth Circle's crosshairs."
"When that threat is over. Until then, it's the best thing for them and us," she reassured him.
From there, Diggle brought Felicity and Oliver to a safe house used by FBI, CIA and ARGUS agents. They said their goodbyes to him, and then the episode flashed forward through Felicity's pregnancy and Mia's birth. A montage showed the two new parents taking care of their daughter through her infancy, until their idyllic life was interrupted by the arrival of The Monitor, who took Oliver away and launched the events of this year's four-show Arrowverse crossover "Crisis on Infinite Earths."
In the flash-forward timeline, Felicity bid goodbye to William and Mia by Oliver's gravestone. "I just wanted us to be all together one last time," she said. "I promised your father I would protect both of you until you didn't need me... It's time for me to go on a journey of my own."
With that, she walked off alone and met up with the Monitor. "I'm ready," she told him, to which he replied, "Where I'm taking you, there is no return."
"I've waited a very long time to see him," she said with a smile. The Monitor opened a portal, and the two walked through it together, presumably to the Arrowverse's version of the afterlife.
Felicity actor Emily Bett Rickards announced her Arrow departure in March. Since then, the show has suggested she would raise Mia in solitude, away from the perils of Star City. The Season 7 finale simply confirmed why and how that happened, though it left her status in the future timeline open-ended.
Airing Mondays at 9 p.m. ET/PT on The CW, Arrow stars Stephen Amell as Oliver Queen, David Ramsey as John Diggle, Emily Bett Rickards as Felicity Smoak, Rick Gonzalez as Wild Dog, Juliana Harkavy as Black Canary, Colton Haynes as Arsenal, Kirk Acevedo as Diaz and Katie Cassidy as Black Siren.