The Newport Gwent Dragons stalwart, the last remaining player from the region's inception ten years ago, has been sidelined since injuring his bicep against Treviso in December.
But he has been unable to overcome a hip injury and has reluctantly announced his retirement.
"I'm devastated with the news and the fact that I will never put my boots on and run onto Rodney Parade with my team mates again," said Jones.
"I have been fortunate to play and work with some great players and coaches spanning 10 years since the inception of the Dragons, many of these players and coaches I am grateful to be able to call close friends.
"I would like to thank everyone at Rodney Parade, who have made my time such an enjoyable experience and helping me to further my rugby career.
"I would also like to thank the fans for all of their support over the years, even though I come from the Ospreys region.
"I feel that a new chapter in my life awaits my family and I, and if the next 10 years are as good as the last you won't hear me complaining."
Jones, 35, made his Dragons debit against the Ospreys in 2003 and went on to play over 170 matches for the Men of Gwent.
He made his Wales debut against Japan in 2001 and won five caps for his country. His last involvement with the national team came during the 2007 summer tour of Australia.