The 36-year-old defender, who won two Premier League titles and a Champions League with Chelsea, was capped 44 times by Spain.
"After so many years living my dream, I feel it's time to start a new chapter in my life," said Azpilicueta on social media.
"I'm grateful for every moment: the wins, the tough losses, the challenges, and most of all, the people I've met and the friendships I've made along the way."
The defender's final game will be Sevilla's visit to face Celta Vigo on Saturday.
Azpilicueta started his career with Osasuna before moving to Marseille in France and then Chelsea in 2012.
The Spaniard started his career as a right-back but also played in the centre of defence and on the left, showing great versatility.
After more than a decade at Stamford Bridge, where he became the club's captain, he moved to Atletico Madrid in 2023 and then to Sevilla last summer.