The 30-year-old underwent three different operations in an effort to cure the problem, which he suffered in Wales' RBS 6 Nations victory over Scotland in February 2012, but has admitted defeat in his battle to return to full fitness.
Bennett won 51 caps for his country and played a part in two Grand Slam successes and three World Cup tournaments. He also won four domestic titles during his time with the Ospreys.
Bennett made the move to French club Lyon in the summer of 2012, but the injury prevented him from making a single appearance for his new team as he turned down the option of undergoing further surgery to hang up his boots.
He said: "My last game was for Wales against Scotland at the Millennium Stadium and I had to come off because I could not walk, let alone run.
"Little did I know then it would be my last game, but it is not a bad stadium to mark that occasion. I did not manage to bow out on my own terms, but it is something I have had to accept.
"Rugby has given me a lot. I was lucky to play in three World Cups and be part of two Grand Slam campaigns and reach the milestone of 50 caps.
"I have been involved in some great games and perhaps my most memorable was the first Six Nations match against England in 2008 when we were written off but went to Twickenham and won.
"There were 13 Ospreys in the starting side and the papers branded the game as a country against the region. The World Cup in New Zealand in 2011 was special because in the two previous tournaments I did not start a game.
"To be involved in the starting side, and have a great tournament in getting to the semi-finals in a country where they love the game, was amazing. I also spent nine great years with the Ospreys and I would like to thank all the players, fans and coaches who have always supported me."
- Sports & Recreation