King called time on his 14-year career, spent entirely with his boyhood club at White Hart Lane, after persistent and chronic knee injuries.
He will remain at the club in an ambassadorial role, and a testimonial match will be held for him at White Hart Lane at the end of the 2012/13 season.
"Ledley has made a magnificent contribution to this club - as a wonderful player, captain and ambassador," Spurs chairman Daniel Levy told the club's official website.
"It has been well documented how he has battled against injury over the years and it is testament to the character of the man how he managed to sustain such high standards of performance on the pitch, while providing such fine leadership."
In all, King made just 323 appearances for Tottenham during an injury-plagued career, scoring 14 goals. He only completed all 38 games of a Premier League season once, in 2004/5.
In spite of that, he was a firm fan favourite, and managed to lift a trophy for the club when Spurs beat Chelsea to win the Carling Cup in 2008.
"I have been here since I was a boy, I have always considered it my club and have always found it hard to imagine wearing the shirt of another team," King said.
"I know that being a one-club man is a rarity these days, but I have always enjoyed being part of the set-up here and the challenge of putting this club up with the elite where it should be.
"I would like to say thank you to everyone at the club and to the fans. I have missed a lot of football over the years, but the Spurs fans have always been patient and incredibly supportive with me during difficult periods. Sadly my injuries and inability to train have now finally brought an end to my career.
"I have been in Tottenham for around 17 years, having started at Spurs when I was 14. It is a second home for me and I pleased that I can continue to work within the club and for the local community, especially after the devastation caused by the riots last year.
"I am already heavily involved with the work of Spurs Foundation and the new stadium scheme will be a major factor in the regeneration of the area, so I am delighted that I shall be part of that."