The Bulgarian midfielder was diagnosed with the condition in March last year and is now in remission.
In a statement released by Aston Villa, the 33-year said: "It is with a heavy heart that I am announcing my retirement from the game."
Petrov, who joined Villa from Celtic in 2006, is continuing to receive treatment.
His popularity at the club has been evident all season with fans applauding throughout the 19th minute of games - in reference to his squad number - in tribute.
He said: "I've never been a person for making grand statements.
"I've only ever got on with my job, while remaining grateful to have great team-mates, great people around me and, most of all, a fantastic family.
"They have been powerful pillars of support when I have needed them most over the past year.
"To my wife, Paulina, and my sons, Kristiyan and Stiliyan, I love you very much and I will always for your constant love and support.
"Also to my mum and dad, my brother and Paulina's mum and the people who have been closest to me throughout this time - you know who you are and I love you all.
"Each and every day I thank God for giving me the opportunity to still be with my family.
"Football has been the other great love of my life, so it is with a heavy heart that I am announcing my retirement from the game.
"The emotions are overwhelming really, but the continued support of family, friends and the great people I have come to know will make it easier for me to move on from the only life I've ever known."
Petrov now intends to set up a foundation to raise money to address issues around the diagnosis of leukaemia.
Petrov feels the quick action after his condition was diagnosed proved critical in his battle.
Referring to the moment last March when he fell ill, he said: "Then something crazy happened, something I thought was just a cold but turned out to be something more serious, something life-changing.
"I played 90 minutes for Villa against Arsenal at The Emirates and I felt fatigued, not myself at all.
"But I thought it was nothing serious. The diagnosis by Dr Richard Lovell was a complete shock.
"Around 7,600 people in the UK are diagnosed each year with leukaemia and about 2,300 people with acute leukaemia.
"Fortunately, I was able to make decisions very quickly and I started my treatment quickly. I needed to.
"My leukaemia is now in remission and I have finished my high intensity treatment. From now on I'll be on the softer treatment, which is two years on tablets. I feel lucky. Not everyone is as lucky as I have been."
Villa have announced that Petrov will lead out the team's traditional lap of appreciation after their final home game of the season against Chelsea on Saturday.
Supporters had also been planning further tributes at the last game of the season at Wigan.
Fans were planning to wear Villa, Celtic or Bulgaria kits and hold banners displaying 'Petrov 19'.
Petrov said: "I wish to thank the fans of Aston Villa and the Villa chairman, Randy Lerner, chief Executive Paul Faulkner and manager Paul Lambert, also the fans of Celtic, the Bulgarian fans and fans of football all over the world who have helped me through the past year with their incredible displays of support and with their personal, moving messages.
"I would also like to thank all of the managers I have worked under and all of the team-mates I have played alongside."