Young confirmed the decision in an emotional statement released on Wednesday, with Ipswich Town facing Queens Park Rangers on Saturday in a match that could seal the Championship club's promotion back to the Premier League.
"I am incredibly proud and fortunate to have achieved everything I have during my career," he said.
"It's not too often you sit and think about this while you are still in the game, but I have lived my dream during the last 23 years. It's now time for some reflection on what I've been able to achieve and the next few weeks and months will be when I decide what I am going to do next."
"But that is all to come. My full focus is on Saturday and helping this club achieve our goal, which is promotion back to the Premier League."
Young has not featured since January due to a persistent hip injury, with his last appearance coming in a 2-0 win over Bristol City on 20 January. He made 15 appearances for the Tractor Boys this season after joining last summer, reuniting with manager Kieran McKenna, who worked with him at Manchester United.
McKenna paid tribute on the club's official website.
"Ashley's career in the game speaks for itself and it has been an honour to have worked with him, firstly at Manchester United and then here at Ipswich this season. The professionalism, competitiveness and quality he displays every day has had a massive impact on the group this season and I know he wants nothing more than to end his career by helping us achieve our goal."
Young began at Watford before earning a £17 million move to Manchester United in 2011, making 261 appearances at Old Trafford across nearly nine years. He won the Premier League title under Sir Alex Ferguson in 2013, the FA Cup in 2016, and the League Cup and Europa League in 2017.
A Serie A title followed with Inter Milan in 2020-21 under Antonio Conte. He earned 39 England caps between 2007 and 2018, representing the country at Euro 2012 and the 2018 World Cup.
Before Ipswich, Young also spent two seasons each at Aston Villa and Everton.