Webb said he had enjoyed the "best seat in the house" while refereeing Premier League games over the past 10 years.
"I am very excited to start this new chapter in my career after a wonderfully rewarding 25 years on the pitch," Webb said in a statement.
"I have spent over a decade with the best seat in the house for Premier League matches, been lucky enough to be involved in nine UEFA and FIFA tournaments, and taken charge of the UEFA Champions League and FIFA World Cup finals.
"Refereeing has given me so much and it's important that match officials who have had the rewards remain in the game to pass on their knowledge."
The 43-year-old, who is regarded as one of the best referees, became in 2010 the first man to take charge of both the Champions League final and the World Cup final in the same year.
Xabi Alonso - Nigel de Jong
In that controversial final in South Africa, when Spain beat the Netherlands 1-0, Webb showed 14 yellow cards - a World Cup final record - and sent off Dutchman John Heitinga. He admitted afterwards that De Jong should have had a straight red.
Webb also officiated at the European Championships of 2008 and 2012, as well as the World Cup finals in Brazil in June. He refereed more than 500 Premier League games, becoming in the process a notorious figure among fans for his perceived bias in favour of Manchester United.
That rumour spread after Liverpool's Ryan Babel shared a Photoshopped picture via Twitter, taking hold despite the fact that the former police sergeant is actually from Yorkshire.
But these were relatively rare blips in the career of an otherwise excellent match official, who spent 11 years as a Premier League referee and nine years as a FIFA referee.
On his retirement he will become technical director of Professional Game Match Officials Limited, which runs refereeing in England.
The statement said that, as technical director of Professional Game Match Officials Limited (PGMOL), Webb will be "responsible for overseeing the technical direction and standards that govern the on-field performance of PGMOL's match officials".
It added: "He will manage the PGMOL training programme and coaching system and will work extensively on the successful development programme that provides a pathway for referees from level 3 through to the select group. "Additionally, he will take a public-facing role, informing and educating on refereeing matters." PGMOL general manager Mike Riley said that Webb was "the foremost referee of his generation and an inspiration for match officials in this country and around the world."
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- UEFA Champions League