Rivera made the announcement at a news conference at George M. Steinbrenner Field in Tampa, Fla.
A likely first-ballot Hall-of-Famer, the 43-year-old Rivera is a 12-time All-Star and played on five World Series championship teams. The career saves leader with 608, Rivera has only blown 39 saves in his career, and posted a 2.21 ERA with 1,119 strikeouts in 1,219 2/3 innings.
"After this year, I will be retiring," he said with his family at his side.
"It's not too easy when you come to a decision like this. After this year, I will be retired. ... Now you're hearing it from me. It's official now."
Rivera said he would have retired after the 2012 season, but sustained a season-ending torn ACL in May, and wanted to exit on his own terms.
"I didn't want to leave like that," he said. "I felt like I wanted to give everything."
He is expected to appear in relief Saturday for the first time since his injury.
"He is irreplaceable," general manager Brian Cashman said. "He is the greatest of all-time. I've known him since he has been in the minor leagues. He has never changed once. You have seen a lot of players get a lot of money and a lot of notoriety and become famous and they change over time. He hasn't changed a bit."
The right-hander has also logged 141 postseason innings, and posted 42 saves in 47 chances with a 0.70 ERA.
Rivera hopes to add to his playoff credentials.
"The last game I hope will be throwing the last pitch in the World Series," he said. "Winning the World Series, that would be my ambition."