Harte said he made the decision "to go out on a high" after helping Bournemouth win promotion to the Premier League last season.
Harte told Talksport: "After playing for over 20 years it is time to hang the boots up and retire.
"I've had offers from a few clubs in the Championship and League One but I thought I would rather go out on a high."
Harte spent nine years at Leeds and helped them reach a UEFA Champions League semi-final, while he also helped his country into the last 16 of the 2002 World Cup.
Bournemouth boss Eddie Howe, who released Harte following the club's promotion at the end of last season, paid tribute to the player.
Howe told a press conference: "My initial feeling was one of disappointment for him because I still felt Ian had a lot to offer the world of football.
"He was such a big personality within our squad last year. Despite the fact he didn't play an awful lot of football for us I looked at him as a real team player.
"He led by example every day and for his age the way he trained last year was second to none. What he could do on a football pitch I think spoke for itself."