The 35-year-old hinted earlier this year that he would make a decision on his future towards the end of the campaign, having been used just five times in all competitions this term.
Britton will bow out of the Liberty Stadium with legendary status, with 536 appearances under his belt since arriving in South Wales from West Ham United in 2002, and he is in contention to feature against Stoke City this weekend.
Speaking to the Swans' official website, the central midfielder said: "I have decided that this year will be my last as a Swans player. It's a sad day obviously, but this season has been very difficult for me. I have had a lot of niggling injuries and I haven't played a lot when I have been fit.
"I have pushed my body through a lot, playing with injuries and injections and what have you over the years, and I think now is the right time. I probably could play on, but this year on the first day of pre-season I did my calf in the warm-up. That kind of set the tone for the season.
"I don't want to spend another year in the physio room and not playing. If I am being honest it's been difficult this year and my body is telling me to stop."
Britton, who played a part in Swansea's rise from League Two to the Premier League, spent time in caretaker charge prior to Carlos Carvalhal's appointment in December.