Thomas has made 214 appearances for the Scarlets since 2002, with the loosehead prop having previously played for Pontypool and Ebbw Vale.
However after a decade as the cornerstone of the Scarlets pack, the 35-year-old has been forced to call it quits with a neck injury.
Thomas, who was capped 33 times, told the club's official site: "It's not easy to have to give up my rugby career but my neck injury is such now that it really is impossible to carry on - with a series of medical opinions telling me that it would be difficult for me to recover full strength even if I opted for surgery again.
"So, the advice I have been given by the surgeons is that I have to retire from the game.
"Ironically for me, I have been really enjoying playing some of the best rugby of my career in the past two seasons and it's really difficult to let go to that now."
Scarlets head coach Nigel Davies added: "Iestyn has been immense for us - and to have such an experienced and trusted professional in your ranks with so many younger players is something that as a coaching set-up you really appreciate and rely on.
"He has given so much to our region and in recent seasons the accolades he has achieved reflect the level of consistency he has delivered in his performances.
"We thank him for all he has given and wish him well now in the future. Let's hope that he has a great send-off now from the game and its supporters over the reminder of his testimonial events this year."
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