The 38-year-old center, once captain of the Montreal Canadiens, was an unrestricted free agent. He had 515 goals and 1,327 points in 1,294 career games. Turgeon won the Lady Byng Trophy for sportsmanship while with the New York Islanders in 1993.
"It's with confidence that I'm going to begin this new chapter in my life," he said at a news conference. "Hockey is a team sport, and I admit my teammates will be greatly missed."
Turgeon said he and his family discussed his injuries and retirement at the end of last year.
"At one point we did decide, as far as retiring, but we wanted to take all summer really to think about it and just to make sure. And at the end of the summer it was the same answer," he said. "Two years ago we thought about it before moving from Dallas to Colorado, but we didn't. ... It was just time."
Turgeon recalled two career highlights -- getting 500 goals and closing the Montreal Forum in 1996.
"I keep a very fond memory of the evening when, as the team captain for the Montreal Canadiens, I carried the team torch from the Forum to the Bell Centre," he said.
He said he realized how lucky he was "to reach my childhood dream of being a player in the NHL and especially with the Habs."
For the immediate future, he will coach his daughter's under-16 hockey team.
"I love being around the kids. ... I love seeing the way they're improving every year," Turgeon said. "Hockey has been very good to me and I want to give it back to hockey."