The 35-year-old, who was part of Liverpool’s 2005 Champions League-winning team, had made 10 appearances for Norwegian club Aalesund this season, but has ended his stay short after admitting he cannot cope with the physical demands of the game.
"My inner goal was to play football at the Norwegian top level until I was 40. But that is not to be. It stops here," he wrote on his personal website.
"Lately there has emerged a completely new feeling in me that I am no longer strong enough to perform at my best.
"I like to play football but the motivation is still not strong enough to run the race at the highest level. This body - and this head - has been through so much over the last 20 years.
"It is heavy and painful admission and very full of emotion but it is most of all honest."
Riise played for a range of clubs across Europe in his career, including Monaco, Roma, Fulham, APOEL and Delhi Dynamos, while earning 110 caps for his country.