The 33-year-old has made the decision after consulting two specialists over an ankle injury suffered in January.
Beattie made 238 appearances for the club since joining from Exeter in 2001 and was capped by England A in 2005.
"I am obviously gutted not to be able to carry on playing the game I love, but having sought medical advice I have to take it seriously," Beattie said.
"I've had a fantastic career and have been very lucky to be able to play for such a long time at a club like Bath.
"I'd like to thank everyone that's helped me throughout my career, from team-mates, to coaches, to the physios who have put me back together a few times."
The Rugby Players Association have pledged to assist Beattie as he adapts to life outside of the game.
"It's always said when retirement is forced on a player," RPA chief executive Damian Hopley said.
"As with all our RPA members, we will support Andy during this transition and will help him assess options for the next stage of his career.
"On behalf of everyone at The RPA I would like to congratulate Andy on all he has done for the game throughout his fine career and wish him the very best of luck for the next exciting stage of his life."
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