The 34-year-old Slovenian was taken by helicopter to a hospital in Innsbruck last Tuesday after the crash when he was thrown off his run and landed in the safety nets.
Although he suffered no serious injury, the only male Slovenian skier ever to win a World Cup downhill feels now is the right time to end a career which began in 1998.
He said: "As I've said many times before until I felt I was I unable to achieve great results, I would carry on racing.
"Now I don’t feel that, I have to stop.
"I had a privilege to be involved in this sport, to do what makes me happy and what I'm passionate about. Most people dream of this, I had the opportunity to do it.”
Jerman won at Garmich-Partenkirchen in 2007 and at Bormio in 2009 and reached the podium on two other occasions.
He made three appearances at the Winter Olympics but having failed to record a World Cup top 10 since March 2011, he has decided not to aim for a fourth Games in Sochi next year.