The 28 year-old centre-cum-wing played in three games in the 2005 Grand Slam campaign and featured in 16 Tests for Wales between 2003-2007. He scored two tries.
Born in South Africa, Luscombe joined Newport Gwent Dragons and made his senior Wales debut as a replacement against Scotland in a pre-2003 Rugby World Cup international in Cardiff.
He moved from the Dragons to the Harelquins before switching to Sixways to join up with former Wales and Dragons coach Mike Ruddock once again.
"It is with great regret that I have to confirm that Hal Luscombe has decided to retire from professional rugby," said Worcester Warriors Director of Rugby, Ruddock.
"Hal has been released from his contract in order for him to pursue different ambitions. He is a terrific guy who has been a fantastic player for a number of years with Newport Gwent Dragons, Harlequins, Worcester and Wales.
"I would like to thank Hal for his service to the Warriors and I would like to pay tribute to his outstanding character and performances over the years, most notably as a member of the Wales Grand Slam winning team of 2005. I wish him every success in the future."