Piszczek has been at the club since the summer of 2010 when he signed from Hertha Berlin.
The 35-year-old former Poland international’s current contract will run out next summer and he has decided to hang up his boots.
Piszczek was part of the Dortmund side that won back-to-back Bundesliga titles under Jurgen Klopp in the 2010/2011 and 2011/2012 seasons.
He has also won two DFB-Pokals during his time at the Signal Iduna Park and was a losing finalist in the 2013 UEFA Champions League, when Dortmund were beaten by Bayern Munich.
Piszczek is currently Dortmund’s vice-captain but has decided to relinquish the position ahead of next season.
In a statement posted to Dortmund's social media channels, he said: "The 2020-21 season will be my last as a professional footballer.
"I want to enjoy this season as consciously as possible. In the past few years I have always loved taking on responsibility together with some of my colleagues and leading the team, in the council but also as vice-captain.
"Now I would like to actively help shape the transition and help others to get involved. For this reason, I have decided to give up the position of vice-captain and also my place on the team council.
"But I will continue to help because I know that my opinion is valued in the dressing room. I will continue to express them in the future and be available to the guys with my advice on any questions they ask me."
Piszczek made 29 league appearances last season as Dortmund finished runners-up to Bayern Munich.
