Afeaki suffered concussion in February 2014 during an Super Rugby match against the Crusaders. He was cleared to resume training as part of a graduated return to play plan.
He suffered a further knock during training the next month and has not played since.
The 27 year old prop played 36 matches for the Chiefs, was an All Black in 2013 and played eight matches for the Maori All Blacks.
Afeaki said retirement was the best decision for his long-term health and he continued to make good progress in his recovery.
"I am very fortunate that I have achieved some awesome things in rugby,'' he said.
''I have been part of a team that has won back-to-back Investec Super Rugby Championships. I have lived out a boyhood dream of playing for the All Blacks, played for a very special team in the Maori All Blacks and captained my Provincial Union, North Harbour.
"During that time I have built some life-long friendships, had some awesome experiences and received amazing support and care from the Chiefs, North Harbour and New Zealand Rugby. But it is now time that I make a decision that is best for my health long term and that is to retire from all rugby."
Chiefs coach Dave Rennie said Afeaki left a big hole in the Chiefs family.
"Ben is an outstanding man who is highly respected and loved by all at the Chiefs. When he informed the team that he was retiring from rugby, it was very emotional. The haka they honoured him with was the most passionate and heartfelt I've ever witnessed.
"His phenomenal work rate and physicality played a massive part in our success in 2012-13 and he will be sorely missed. He has our full support in this decision and has used the past 14 months since his injury to clarify his future beyond his playing days. We are totally committed to assisting him in transitioning into the work force."
New Zealand Rugby (NZR) said Afeaki had been fully supported by the Chiefs and New Zealand Rugby medical staff as he dealt with his injury.
"Ben has put his health first and that is the right call," said Rugby General Manager Neil Sorensen.
"He has been a great ambassador for the game and we will be doing all we can to help him with his career off the field."
Sorensen said Ben would remain on full pay for the remainder of the year, his rehabilitation would continue to be overseen by NZR and Chiefs medical staff, and he would continue to receive vocational support.
"Rugby is a contact sport and injuries happen. Thankfully career ending injuries like the one Ben suffered are rare as most players recover quickly from concussion injuries with appropriate care."
"Nothing is more important than the health and welfare of our players," said Sorensen. "Our aim is to manage risks to ensure rugby is as safe as possible.
"There is rightly an increasing focus on concussion. We are proud of our efforts to date with our rugby education programmes through RugbySmart, medical processes and other support which have greatly reduced serious injuries across the game.
"We are also continuing to evolve our approach. For example, we are currently undertaking a trial to allow Super Rugby match doctors to review video of incidents to assist their ability to detect possible concussion injuries. We have also extended the Northland Blue Card trial."
North Harbour pays tribute to Afeaki
Afeaki spent his entire provincial career at North Harbour, having first turned out for the province as a 19 year old in 2007 and played 58 games. North Harbour Chief Executive Brett Hollister said Afeaki would be missed by fans and team-mates.
"He has been a great servant of North Harbour rugby where he began his professional rugby as a young man. He has achieved the highest honours through his skill and professionalism and we wish him all the best for the next stage of life."
