Worsley, who made more than 300 appearances for Premiership club London Wasps, called time on his career after failing to recover from an injury sustained last season.
"Since March I have been following medical and rehab advice but it hasn't helped," said the 34-year-old Worsley, renowned for his defensive skills.
Worsley missed out on appearing in what would have been a fourth Rugby World Cup when he was dropped from England's training squad for the recent tournament in New Zealand.
"Last season I suffered an injury to my neck that has effectively ended my career," Worsley said.
"Restarting contact work during the England World Cup camp made it obvious that I could not continue.
"My life as a rugby player started at Welwyn under-nines and finished in an England training session -- I want to say thanks to everyone who helped me on that path," added Worsley, capped 78 times by his country and once for the British and Irish Lions, against South Africa in 2009.
"I'm proud of what I achieved and how I played the game."
Worsley, a member of England's 2003 World Cup-winning squad, won two European Cups with Wasps and helped the club to four domestic Premiership titles.
"Joe is a real legend at Wasps and we are very sad to see his playing days come to an end," said Wasps owner Steve Hayes.
"He will leave big boots to fill and we wish him all the very best as he moves on with the next stage of his life."