Hooker Best has been capped 116 times by his country and won the Six Nations four times, including Grand Slams in 2009 and 2018.
The 36-year-old won the Pro12 with Ulster in 2006 and has scored 23 tries in 219 appearances for the club following his debut in 2004.
"It is with mixed feelings that I announce my retirement from Ulster Rugby as of the end of this season," Best told Ulster's website.
"This feels like the right time for me to go out on my terms, a luxury for which I feel very privileged.
"I am very excited for the end of the season with Ulster Rugby and for the upcoming World Cup with Ireland, both of which I hope to finish with a massive high, playing at the top of my game."
Page 2: 10:09
Best captained Ireland to their first win against world champions New Zealand in 2016 and led the country to second in the world rankings.
He toured with the British and Irish Lions in 2013 and 2017, although he was not selected for a Test match.
Speaking about Ulster, he continued: "In my 15 years at this brilliant club, I have been lucky to have met, played alongside, been coached by and supported by many great people, and I would like to thank every individual for the time they have invested in me since 2004.
"I grew up supporting Ulster Rugby, have been fortunate to play and captain UlsterRugby, and now look forward to supporting Ulster Rugby in the future with my family."
Page 3: 10:16
Ulster operations director Bryn Cunningham said Best would be remembered as "one of the greatest legends of Ulster and Irish rugby".
"No player representing Ulster Rugby has had a more profound impact in the professional era than Rory," said Cunningham.
"During a match, players turn to Rory for leadership and direction. He has been our all-encompassing talismanic figure for more than a decade.
"Rory will justifiably go down as one of the greatest legends of Ulster and Irish Rugby."