The 32-year-old wing, who scored 31 tries in 57 Tests for England, has been released by Sale Sharks despite being the club's player of the season.
Cohen believes he could play on for another two years but he has turned down offers from clubs in both England and France.
Instead, the former Northampton and Brive wing will focus his future on heading up the Ben Cohen Stand Up Foundation, an organisation set up to tackle bullying and homophobia.
"To be honest, I would never have imagined my career was going to move in this direction after my professional rugby career, but here we are - it's happening," he said.
"I have reached the top in my sport. It has been an incredible journey and has put me in the privileged position I am in today to be able to work on these exciting new projects through the StandUp Brand. As athletes, it is not enough just to have strong bodies. We must have strong characters and use our voices to support those who need and deserve it."
Cohen is the latest of England's 2003 veterans to hang up his boots. The only members of England's starting XV from the World Cup final victory over Australia still playing are Jonny Wilkinson, Steve Thompson, Lewis Moody and Mike Tindall, though Josh Lewsey made a brief comeback for Wasps this season.
Cohen made his Northampton debut at 17 and was part of the Saints team that won the 2000 Heineken Cup, the same season in which he made his England debut.
Quick, powerful and a top-class finisher, Cohen became an integral member of the England side that went on to win the World Cup.
Cohen played on for England until 2006 but he struggled to hit those heights again. He spent 18 months with Brive before returning to the Aviva Premiership to join Sale, all the while living in Northampton.
In recent years, Cohen has developed his role as an advocate of equality and his new venture is aimed at helping those in the lesbian and gay community who are struggling to come to terms with their sexuality. Rugby will be the vehicle.
Cohen is heading off to the United States on what is branded an Acceptance Tour, visiting Atlanta, New York, Washington and Seattle to work with gay and gay-friendly clubs to raise funds and promote the anti-bullying message.
"It is incredibly exciting and we have so many plans in the pipeline to be able to make a difference," he said.
"In my view, rugby is a very inclusive sport. Everyone can get involved in one way or another, so I will be using it as a vehicle to drive my message of acceptance out to people from all walks of life, everywhere. There is a lot of work to be done. Attitudes need to change. Young people should not be bullied into taking their own lives. That is what is happening and it needs to stop."
"I would like to thank everyone who has supported me over the years. It has been an incredible journey and there are so many of you who have stuck by me through thick and thin. I really am grateful to all of you. I have friends who have known me since I was 17 years old and playing at Saints and new friends who are supporting my cause and standing up with me against bullying. You all hold a special place in my heart.
"I see this as the beginning of my new career and I have much work to do. The Ben Cohen StandUp Foundation is being officially launched at the beginning of our Acceptance Tour this coming week. I look forward to keeping in touch with everybody and am excited about standing up for equality and making a difference"
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