The 21-year-old, one of South Korea's most recognisable sporting figures, won gold with a record total of 228.56 points in the 2010 Vancouver Winter Olympics but has barely competed since then.
"I have decided to retire after the 2014 Winter Olympics in Sochi, Russia," Kim said.
"Although I wanted to end my career at the 2010 Vancouver Olympics during my adolescent years, I have decided to make a fresh new start to round off my career, by extending my final destination to Sochi Winter Olympics 2014."
Kim competed in the world championships in April last year where she finished second, burdened with what she described as the pressures of training and high expectations from fans.
Short of competition, Kim said her focus would now be on improving her physical strength and performance in training sessions.