"Last season I suffered an injury to my neck that has effectively ended my career. Since March I have been following medical and rehab advice but it didn't help," said Worsley.
"Restarting contact work during the England World Cup camp made it obvious that I could not continue.
"My life as a rugby player started at Welwyn under 9s and finished in an England training session - I want to say thanks to everyone who helped me on that path.
"I'm proud of what I achieved and how I played the game."
Worsley won almost everything it was possible for him to win since joining the Wasps academy as a 16-year-old in 1993.
The back-row veteran lifted two Heineken Cups, four Premiership crowns and three Powergen Cups with his solitary senior club.
He won 78 caps for England and was part of the World Cup winning squad in 2003 and also represented the Barbarians as well as the Lions.
Worsley featured six times for the 2009 Lions in South Africa, making his debut in the tour opener against the Royal XV and earning a well-deserved Test cap in the 28-9 win over the Springboks in the third and final match of the series.
"As a former team mate, we always sensed that Joe had all the necessary attributes and humility to become an outstanding international player and he played a leading role in both Wasps and England successes over the years," added Damian Hopley, CEO of The Rugby Players Association and an ex-Wasps colleague of Worsley's.
"Joe was a fantastic professional and leaves behind tremendous memories of an exceptional career which saw him lift every major trophy in English, European and International rugby."