DeMerit suffered a torn ankle ligament in the Vancouver's 3-3 draw with the Philadelphia Union on June 7 and decided against a return to the professional game.
"Even if I was to get back to a level where I could potentially play again, I would be putting at risk the reputation that I have spent so many years trying to create, and I won't do that," DeMerit said in a statement. "I've never taken the field just because I can. I'm either all in or all out."
The 34-year-old enjoyed an inspired career that began in England's lower-tier amateur leagues before earning a regular spot with Watford FC, the club he helped guide to the Premier League in 2006.
DeMerit remained at Watford until 2010 when he was unveiled as the first player signed by Vancouver in preparation for the club's entry into MLS. He made 71 MLS appearances for the Whitecaps, 69 of them starts, scoring one goal and adding one assist.
A key member of the United States national team from 2007-10, DeMerit anchored the defense during the nation's memorable runs in the 2009 Confederations Cup and 2010 World Cup.