The 36-year-old former Sheffield Wednesday, Preston, Leicester, Leeds, Stoke and Sheffield United forward has enjoyed an 18-year playing career, but has been restricted to eight appearances this season for the Minstermen, where his career began in 1995.
"It has been a difficult and emotional decision for me to make, but I feel it is now the right time for me to finish my playing career," Cresswell told the club's official website.
"Due to injury issues, I don't feel I can perform at the level I would like to anymore and that is very frustrating for me.
"I have had a wonderful career and have reached the highest level playing in the Premier League and can look back on some good times and great achievements."
In recent months Cresswell has been struggling with an eye complaint and a knee problem, the latter related to a back injury sustained eight years ago.
"Nothing will compare to the enjoyment I have experienced playing the game I love," Cresswell added.
"However, I am now embarking on part two of my professional life and I'm focussing on a future career coaching first-team football.
"After three years' coaching education, I have now achieved my UEFA A License and I'm going to spend the coming months visiting top clubs in this country and overseas to further my development and experience."
York boss Nigel Worthington brought Bridlington-born Cresswell back to Bootham Crescent initially on loan in March this year and he scored two goals in his first three appearances.
Cresswell played a key role in the Minstermen's escape from relegation last season.
"It's a sad day for Richard and for the club to lose such a player," said Worthington.
"But injuries do have a serious impact at the back end of a player's career. I also retired at a similar age and it enabled me to concentrate on coaching and football management and I'm sure Richard has a bright new career ahead of him.
"We have offered Richard a role at the club, but he is keen to gain more experience over the coming months.
"He is a great professional and it has been a pleasure having him at the club. I would like to thank him for all his hard work and effort during the time he has been at York City."
Cresswell first joined York aged 13 and signed his first professional contract with them in 1995.
Sheffield Wednesday paid £950,000 to take him to the Premier League in 1999 and following moves to Leicester and then Preston, he joined Leeds for £1.15million in 2005.
He had a further spell in the Premier League with Stoke, for whom he signed in 2007, and then spent three years at Sheffield united before his return to York.
- Sports & Recreation
- Premier League
- Sheffield United