The Australia international made the announcement on Friday after informing his Waratah team-mates at training.
But 28-year-old Vickerman denied suggestions he was considering a move to Europe, describing the decision to leave the Waratahs as a 'lifestyle and career' choice rather than a rugby-related one.
"Let me say from the outset this has never been about money and I'm fully committed to the Waratahs this season," said Vickerman. "I'm totally focused on winning the Super 14."
"I made that commitment to the team and they were the first to know about my decision which was very important to me.
"I know there's been some speculation about clubs overseas but this decision is independent of that because it's about my career off the field which is starting to take shape through my studies and business contacts."
However Vickerman, who has also played for the ACT Brumbies, left the door open for a return to the Super 14 competition sometime in the future.
"I haven't ruled out a return in a couple of years and hopefully I'd still be competitive like Joe Roff was when he returned from a brief break from the game here," he said.
Waratahs coach Ewen McKenzie expressed his disappointment at Vickerman's decision but admitted he would not stand in his way.
"It's a massive loss no doubt about it, but Dan's made his decision and I respect him for it," McKenzie said.
"We gave it our best shot but Dan's mind is made up and I expect nothing less than his best season for the Waratahs in 2008.
"I appreciate his honesty because it wasn't easy to stand up in front of the group and tell them this is going to be his last season. But he did it and did it well.
"This could be his last shot at a Waratahs' Super 14 title so his motivation will be higher than ever before and I'm sure the entire squad will feed off his enthusiasm."
South African-born Vickerman has made 37 appearances for the Waratahs and 33 for the Brumbies after making his debut with the ACT club against the Sharks in 2001.
He has also represented Australia on 52 occasions after playing his first match in Wallabies' colours against France in 2002.