"The Valencia Open 500 will be my final tournament, in the best possible scenario," Ferrero told a news conference presenting the ATP event.
"This season injuries have prevented me from playing with regularity and it was a tough year as I realised on the court that I did not have the same ambition after 14 years at the top level," added the 32-year-old.
"I am starting a new phase in my life with tremendous excitement, I will continue to be involved with tennis through the Valencia Open, the academy, the foundation that carries my name and other projects."
Ferrero, who has slipped to 111 in the latest singles rankings, turned professional in 1998 and went on to win 15 titles, including the Masters events in Monte Carlo and Rome.
As well as his Grand Slam title at Roland Garros, he reached the final there in 2002 and the U.S. Open final in 2003, after which he rose to number one and stayed there for eight weeks. His last title came in Stuttgart in 2011 on his favoured clay.
Ferrero played in 17 Davis Cup ties for Spain, compiling an 18-6 record in singles rubbers, and helped the Iberian nation to their first triumph in the competition in 2000 and subsequent victories in 2004 and 2009.
"Among the memories I would pick out the Davis Cup win in 2000, because I understood afterwards how much it meant to the country," said Ferrero, who clinched the trophy by beating Australian Lleyton Hewitt in the fourth singles rubber.
"But certainly for a player winning a grand slam or getting to number one in the world is the most important," he added.
"What I will miss most is the competition, it will difficult to fill the void."