The 28-year-old Ellis made only 24 appearances for English champion Leicester Tigers since undergoing left knee reconstruction in 2007. He injured the same knee last season and has decided to quit after taking medical advice.
Ellis, who won 27 caps for England and played for the British and Irish Lions in South Africa last year, said Thursday it "was not the way I wanted to end my career" but that he had no option after consulting doctors.
The No. 9 was capped by England at every level and played all his career at the Tigers.