The former Wales international suffered the injury while playing for the Saints earlier this year and has been unable to make a full recovery.
"Obviously I'm gutted and devastated that my career has finished this way," said the 31-year-old.
"No player wants to retire, whether it's part of a natural process or because of injury - you want to think you can go forever.
"It's been a massive shock and it probably won't sink in until I'm watching the players running out and I'm not part of it. It's been great at the club and I've enjoyed myself.
"Playing for my country was my major career highlight."
Powell was awarded three caps for Wales during his career.