The 39-year-old goalkeeper returned to the Saddlers in October 2010 having enjoyed 11 loyal years at the Banks's Stadium between 1993 and 2004, leaving for West Ham before a later spell at Tottenham.
It was in January last year that Walker made his 530th appearance for the midlands club, breaking Colin Harrison's 30-year record.
The memorable achievement came during a season in which he enjoyed 27 starts, leading to a new contract last summer which also saw him take on some coaching duties.
However, Walker has found first-team opportunities hard to come by this season, not making an appearance, and it is for that reason he has come to such a tough decision.
The veteran keeper told the club's official website: "This has been one of the most difficult decisions I have ever had to make. This club is very close to my heart and will always be part of me.
"However, things have not panned out as I would have hoped this season and I have not been able to play as influential role as I would have liked. I am at a stage of my career where I need to take stock and consider my options.
"One of my proudest ever moments was becoming the Saddlers' all-time appearance record holder and that will live with me until the end of my days.
"I wish the club all of the best in the future; we have a young and exciting team at present and the future looks bright.
"Most of all I would like to thank the supporters who have taken me in as one of their own and made my time here something I will never forget."