The legendary India batsman made the announcement following the conclusion of this season's action on Sunday night.
The Mumbai Indians player did not feature in his team's 23-run victory over Chennai Super Kings in the final. He injured his left hand after hitting a ball for six against Sunrisers Hyderabad a fortnight ago.
"This is my last IPL," he said during a television interview after his side's win. "This has been a fantastic season. I thought our third IPL season was the best before this.
"I think this is the right time to stop playing the IPL. I am 40. Got to accept it. I had decided this was my last season.
"This is the best point to say 'thank you very much' to all the supporters and well-wishers," he said.
The veteran, though, has not made it clear whether he would present the Indians in this year's Champions League Twenty20 competition.
In 78 IPL matches, Tendulkar scored 2,334 runs at an average of 34.83 and a strike rate of 119.81. He scored one century and 13 fifties.
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