Van Buyten left Bayern Munich on a Bosman in July and, despite reported interest from Anderlecht, the veteran has opted to hang up his boots.
The Belgian represented his nation in this summer's World Cup, but says that his body has suffered as a result of preparing for the trip to Brazil, claiming that it is "impossible" to carry on.
"My final goal was to play at the World Cup and to give something back to my country. Since January I worked hard and prepared for the big event with the utmost professionalism. My body has certainly suffered for it," he wrote in La Derniere Heure.
"I was honoured when various proposals arrived while I was in Brazil. In particular, Anderlecht's efforts touched me deeply. But those who know me well know that when I engage in a project, I do so at 100%.
"I have tried over the past few weeks but my body tells me it's impossible. I don't want to disappoint a club like Anderlecht and its supporters. That is why I have reluctantly decided to decline Anderlecht's offer. A new life begins for me and I want to spend more time with my wife, my children, and the people I love."
Van Buyten, who enjoyed a brief loan spell at City in 2004, making just five appearances, helped Bayern to four Bundesliga titles and one Champions League in an eight-year spell in Munich.