The hard-working forward played a key role as the Foxes upset the odds to win their first league title under Claudio Ranieri, making 36 Premier League appearances and scoring five goals in the 2015/16 season.
The 37-year-old also finished as Japan's all-time third-highest scorer with 50 goals in 119 appearances.
"I have decided to retire at the end of the season," Okazaki posted on Instagram.
"I have given everything as a football player but I have realised that my body is worn out and I am reaching my physical limit."
Okazaki began his career with J-League club Shimizu S-Pulse and played in Germany with Stuttgart and Mainz before joining Leicester in 2015.
He scored a spectacular overhead goal against Newcastle in their title-winning campaign to put Ranieri's side five points clear at the top of the table with eight games remaining.
Ranieri said the following season that Okazaki was "important for the team because he presses a lot".
"He is our 'dilly-ding, dilly-dong'," said the Italian. "He wakes up our players - he has the bell."
Okazaki played at three World Cups and was part of the Japan team that won the Asian Cup in 2011.
He is currently at Belgian side Sint-Truiden, after playing for several Spanish clubs following his Leicester exit in 2019.
He has struggled with injury this season and has not played since December.
"I will talk about my retirement again at the end of the season," he said.
"Until then I will try to get back to fitness and make a contribution to the team."
