The 34-year-old Leicester Tigers captain has 72 caps for Ireland to his name but has not featured since last autumn’s World Cup having been absent from the 2012 Six Nations.
He was part of the Irish team that won the Grand Slam in 2009 and he went on the British and Lions tour to New Zealand in 2005.
But after being left out of the tour to New Zealand, Murphy has decided to hang up his boots.
“You know when it’s time to hang up your boots at any level,” Murphy told the Leicester Mercury.
“It is time for some young lads to come in and prepare for the next World Cup.”
“I have had some tremendous memories with the squad.”
Murphy is the latest in a string of Ireland players to announce their retirement, following on from Shane Horgan, Jerry Flannery, David Wallace and Denis Leamy, who was forced to call it a day on Tuesday with a hip injury.
The Munster back-row made 57 appearances for Ireland but featured just seven times for his province this season.
“I find it hard to put into words how much it has meant to me to play for Munster and Ireland – it was a dream come true,” said Leamy.
“I was very lucky to play with some of the greatest players ever to wear the jerseys and feel blessed that I was part of winning teams.
“I’ve had a great career, wish it had gone on a little longer but I’d like to thank all the coaches, players, medical staff and management who have helped me over the past decade.”
MORE: The latest football news
MORE: The latest tennis news