Kelly, a former Navy pilot who joined NASA in 1996, will leave the agency April 1.
"This year-in-space mission was a profound challenge for all involved, and it gave me a unique perspective and a lot of time to reflect on what my next step should be on our continued journey to help further our capabilities in space and on Earth," Kelly said in a statement.
He gave no further details on his plans post-retirement.
However, Kelly -- who is allowing his body to be studied to further research on the effects of long-term spaceflight -- will "continue to participate in the ongoing research related to his one-year mission," NASA said.
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"He will provide periodic medical samples and support other testing in much the same way that his twin brother, former astronaut Mark Kelly, made himself available for NASA's Twins Study during his brother's mission."
His latest mission lasted 340 days, and gave him a US record of 520 cumulative days in space.
Kelly said he hoped the legacy of his near-year mission would be to help pave the way toward a deep space mission to Mars someday.
For now, the risks of long-term spaceflight remain unclear, amid concerns such as high radiation, food supply and the psychological challenges of spending months or years away from Earth.
"I can think of no one more deserving of some well-deserved rest and time on the same planet as his family and friends.