"I love this game. I've given it everything I have," Dielman said in a statement on the team's website. "It's time for me to focus on my future and my quality of life.
"I want to thank the Spanos family and the Chargers for giving me the opportunity in the NFL. Because they believed in me, I was able to realize a dream and for that I will be forever grateful."
Dielman, a four-time Pro Bowler, was scheduled to earn $5.5 million in 2012, but concussions, including the most recent one, suffered last season against the New York Jets on a controversial play, ended his career.
Dielman's decision to retire is a change in his stance from last month after the 2011 season ended, when he said he was willing to risk his health in pursuit of winning a Super Bowl ring.
He missed the final 10 games of the 2011 season after suffering the concussion against the Jets.
"Kris played the game the way it's supposed to be played: with heart and passion," Chargers President Dean Spanos said. "He's a throwback . an old-school player. All he cares about is his family and playing football and today he's making family his top priority, as it should be, and I respect him tremendously for that.
"He's universally respected by the players and coaches around the league ... he's respected by his teammates, who voted him lineman of the year three times. And he's a fan favorite.
The 320-pound Dielman was staggered by the injury early in the fourth quarter Oct. 23, but continued to play because the Chargers were out of offensive linemen after other injuries. The team didn't diagnose his condition until after the game.
Dielman suffered a grand mal seizure on the flight home. An ambulance met the team plane and Dielman was hospitalized overnight.
Ten days after Dielman was hurt, the league's injury and safety panel told game officials to watch closely for concussion symptoms in players. Officials were told that if they believed a player had suffered a concussion, they were to take appropriate steps to alert the team and get medical attention for the player.
Information from ESPN NFL Insider Adam Schefter and The Associated Press was used in this report.