Villa, who turns 38 next month, will retire at the end of Vissel Kobe's season.
The forward has scored 12 goals in 26 J.League games for Vissel Kobe, the club he joined after a spell with New York City.
"Thank you for an outstanding career, @Guaje7Villa," Vissel Kobe wrote on Twitter, the club confirming on their website that Villa would retire at season's end.
Villa enjoyed a fine career, starring with Sporting Gijon before earning a move to Real Zaragoza, and a switch to Valencia followed.
After scoring more than 100 goals for Valencia, Villa joined Barcelona for three seasons – winning two LaLiga titles and a Champions League – before moving to Atletico Madrid.
Villa later spent four seasons with New York City and a brief spell at Melbourne City before heading to Japan.
He also played 98 games for Spain, winning Euro 2008 and the 2010 World Cup, and holds the record for most goals for the nation with 59.
Villa won the Golden Boot at Euro 2008, while he netted five times at the 2010 World Cup.
It was confirmed on Wednesday (AEDT) that Villa is a lead investor in Queensboro FC, which is set to play in the USL Championship beginning in 2021.