The 33-year-old South African-born player, originally from Krugersdorp near Johannesburg, won 23 caps in three years for Les Bleus.
He featured at the 2015 World Cup and started the embarrassing quarter-final defeat by eventual champions New Zealand.
“Rugby has been a part of my life since I was a little boy and it will continue to be but I will no longer play this beautiful game,” he said on Instagram.
“I arrived in France 11 years ago with nothing else but a backpack and heart full of dreams, never would I have imagined I would have experienced what I have experienced,” he added alongside photos of him playing for clubs Castres, Brive, Bayonne and Clermont, as well as for France.
Spedding, best known for his accurate long-range kicking from hand and the tee, was refused the status of a player who had come through an academy by the national league (LNR) despite his les Bleus appearances and holding a French passport.
He had taken the LNR to the Conseil D’Etat, France’s supreme court, last May arguing the decision prevented him “finding an employer” but his appeal was rejected in April.
His club highlight came in lifting the Top 14 title with Clermont for only the second time in the outfit’s history in 2017.
Spedding’s current side Castres are defending French champions and are battling for a spot in the end of season play-offs with two rounds of the regular season remaining.