The 24-year-old has hung up his boots on medical advice after sustaining a severe shoulder injury during a pre-season friendly against Aix-en-Provence in 2010.
He had made eight first team appearances for Bath until the injury and has since been working within the club's commercial and marketing department.
He will look to remain involved in rugby through coaching and identifying young talent coming through the ranks.
Announcing his decision to retire, Hobson said: "It has obviously been incredibly difficult for me, especially not knowing whether I would be able to play again during the early months of my rehab.
"However, having sought the advice of medical professionals I need to take it and so have made the difficult decision to retire.
"I love rugby and want to stay within the sport where I can. I'm looking to move into coaching and have already done some with the Bath Uni team and the Academy here at Bath, so I'm hoping to continue that, as well as possibly going back to University to study.
"I'd like to thank the club for all their support over the last two years. The experience of working in both the commercial and marketing departments has given me a great opportunity and I know will have benefited me as I look to start my new career."
Martin Haag, who coached Hobson, added: "It's obviously very sad and disappointing for Scott that he has had to retire, especially as he had a bright future ahead of him.
"He is an intelligent young man and one who has a great knowledge of rugby, and I have no doubt he'll be able to use that as he moves forward with the next stage of his career."
RPA Rugby Manager and former Bath prop, David Barnes, said Hobson had so much potential.
"Richard Bryan, our RPA Player Development Manager for Bath has been working closely with Scott to try to make his transition as smooth as possible during what is understandably an upsetting and daunting period of his life," he said.
"I know Scott is keen to keep involved in the game and to explore potential coaching and other opportunities and we will continue to support him at every opportunity."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.