Young, 32, needs an operation on a chronic neck injury which has caused numbness in his left hand and arm.
The specialist loose-head prop played through the problem to help the ACT Brumbies win the Super 14 title - but called it quits after seeking the advice of three different doctors.
Young ends as Australia's second-most capped prop, behind only Ewen McKenzie, after playing 46 times for the Wallabies.
He started every one of those Tests, including the 2003 World Cup final.
In nine years with the Brumbies Young racked up 100 appearances and missed only three games through injury.
He said: "If you had told me 10 years ago that I would play 46 Tests for the Wallabies and over 100 Super 14 games for the Brumbies, I would have been delirious.
"It has been a great ride with a lot of very good memories and I leave the game with lifelong friendships in Australia and around the world.
"It will be tough to leave a game that has been my life for the past 10 years.
"It's early days yet, but I will probably turn my energies to our family pubs, the Concord Hotel and Wiseman's Ferry Hotel."
Wallabies coach John Connolly described Young's retirement as "a big loss for Australian Rugby".