O'Connor, 33, is currently in his second spell with Connacht, having returned to Galway from Wasps in 2007.
He won 12 Test caps, including being part of Ireland's 2006 Triple Crown-winning team, while his Wasps career featured two Heineken Cup final victories and two Premiership titles.
"I am happy with this decision I've come to following 14 years playing professional rugby, and my body is telling me that it's 'my time' now," O'Connor said.
"I've enjoyed my playing career massively, and it wouldn't have been possible without all the people who have supported me along the way.
"All the coaches and support staff I've worked with at both Connacht and Wasps have pushed and moulded me into the player and person that I am today.
"Looking ahead to my future, I hope to remain working in the rugby industry and keep an involvement with Connacht.
"I have a degree in strength and conditioning and wish to apply that knowledge, along with my first-hand experience, in a sports performance capacity."
- Sports & Recreation