He joined the club from Wasps in 2003, and has made nearly 60 appearances. The 29-year-old also won two England caps.
He said: "I'm obviously very disappointed that, for medical reasons, I am not able to play. My neck's been feeling really good and is quite strong, but there is still a weakness in my left arm as a result of the same injury, which has made the decision for me.
"As much as I would love to have played - and I still have a great passion for rugby and for Bath in particular - for medical reasons the doctors have told me not to play.
"Although it is a difficult decision, it is probably the right one."