"I had an operation on both shoulders in November because they were getting too painful for me to continue playing and there was quite a bit of damage in both of them," said Jones, who won the last of his 13 Wales caps in the draw with Fiji in November 2010.
"After rehab, one shoulder has improved pretty well but the other one is at the stage where there is no hope of getting back to the strength and stability needed to play rugby. So, the advice I have been given by the surgeons is that I have to retire from the game.
"It's been a massive blow for me and it's a hard pill to swallow at the moment."
Jones made his Wales debut against Samoa in the autumn of 2000 and went on to make seven starts and six substitute appearances across a decade of service to his country.
His form for his region won him plenty of plaudits as he became one of the Blues' most consistent performers for eight seasons having joined from the Celtic Warriors in 2004.
The former Ebbw Vale, Bridgend and Bath star became the first Blues player to make a century of appearances for the region in 2008 and has since taken that tally to 175.
He now intends to concentrate on his business interests and he admits he has now interest in moving into coaching in the immediate future.
"I have my own business, J&D Water Consultants, which is a water treatment and hygiene company that has been running for five years now," added the 34-year-old.
"My business partner and I set up the company five years ago and started off working from his house. We have now expanded with a unit in Bridgend and things are progressing well.
"We are working all over the UK and the company is evolving. It's a great challenge and one I am really looking forward to throwing myself into.
"I have been a professional rugby player now for 16 years and, in my opinion, being a rugby coach requires twice the commitment of being a player.
"I have a young family and I would like to spend weekends with them now and appreciate my kids and my wife.
"To be a top coach, you have to put in an incredible amount of commitment to be successful. To maintain that intensity after being a player is something that I don't think is healthy to do immediately. I think it's healthier to take a step back and do something else in life."