The 37-year-old Bryant made the announcement in a post on The Players' Tribune on Sunday, writing a poem titled "Dear Basketball."
"My heart can take the pounding. My mind can handle the grind. But my body knows it's time to say goodbye," wrote Bryant, the third-leading scorer in NBA history. "And that's OK. I'm ready to let you go. I want you to know now. So we both can savor every moment we have left together. The good and the bad. We have given each other all that we have."
Bryant, made the all-star team 17 times and played his entire career with the Lakers. He is in the final year of a two-year deal that will pay him $25 million (£16.6m), making him the league's highest-paid player.
However, he has had a poor start to the season after two injury-riddled years, something which appears to have influenced his decision to retire.
"I'm the 200th-best player in the league right now," he said after a defeat earlier this month. "I freaking suck."
But his fans will remember his last-second heroics, a tireless work ethic and a player who last year overtook Michael Jordan to become number three on the NBA’s all-time scoring list.
Adam Silver, NBA commissioner, said he was one of the greatest ever players of the game.
"Whether competing in the finals or hoisting jump shots after midnight in an empty gym, Kobe has an unconditional love for the game," he said.
The Lakers have 66 games games left after Sunday, giving him plenty of time to say goodbye to his legions of fans. The team's next away game is in Philadelphia, Bryant's hometown.
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