The 45-year-old knuckleballer made the announcement at the team’s spring training facility Friday.
Wakefield played for the South Atlantic League Augusta Pirates in 1989.
After two seasons with the Pittsburgh Pirates, the right-hander signed as a minor-league free agent in April 1995.
He was 186-168 with a 4.43 ERA with the Red Sox. Only Roger Clemens and Cy Young had more wins (192) with the team.
Wakefield is first in team history with 3,006 innings and 430 starts, and second in games and strikeouts.
For his career, Wakefield was 200-180 with a 4.41 ERA
He was 7-8 with a 5.12 ERA last season in 23 starts and 10 relief appearances.
He won two World Series championships in Boston.
“There were a few seasons I didn’t know if I was coming back, but I kept coming back and proving myself year after year,” Wakefield said. “I was fortunate enough to play 17 years here. It’s been a great one. I’ve been very blessed.
“I am just very grateful.”
Wakefield was the oldest player in the majors last season.
On Sept. 13, Wakefield earned his 200th win on his eighth try, in an 18-6 rout of the Toronto Blue Jays at Fenway Park.
Wakefield went six innings and overcame a shaky outing to retire his final six batters.
He left with a 6-5 lead after allowing six hits and two walks. He struck out two.
The following day, prior to a matinee game with Toronto, he was honored for his accomplishment.
It turned out to be his last victory.
“Now,” he said, “I’ll have a lot of time to really reflect on all of the accomplishments I have been able to do.”