Xabi Alonso will retire from playing when his Bayern Munichcontract expires at the end of the season, according to Bild.
The German newspaper claims Alonso told Bayern of his decision before the winter break.
The former Liverpool player, 35, is a two-time Champions League winner and helped Spain win the World Cup in 2010.
Xabi Alonso career honours
Champions League: 2004–05
Super Cup: 2005
FA Cup: 2005–06
FA Community Shield: 2006
Champions League: 2013–14
La Liga: 2011–12
Copa del Rey: 2010–11, 2013–14
Supercopa de España: 2012
Bundesliga: 2014–15, 2015–16
FIFA World Cup: 2010
European Championship: 2008, 2012
Alonso started his career in his homeland with Real Sociedad before arriving in the Premier League in 2004 where he became a key member of the Liverpool squad.
Xabi Alonso’s achievements at Anfield earned him a £30million move to Real in 2009, where he helped the club to yet another Champions League triumph in his final season at the Santiago Bernabeu.
After five years in Madrid, Alonso moved to Munich where he has remained; winning the Bundesliga twice, the German Cup and the German Super Cup.