The 35-year-old, who won 72 caps for Ireland, has been troubled by a knee injury for much of the year. He has made more than 320 appearances for Leicester, who will face Harlequins in their Premiership play-off semi-final clash on Saturday.
"I think it is the right time to go," Murphy said.
He is expected to join Leicester's coaching staff next term as a skills specialist.
- Sports & Recreation