"After been given the opportunity to take some time off and step away from the game, I've come to the decision that wasn't the easiest to make, yet I feel is the right one," Kieswetter, 27, said on Somerset's website.
"Having gone through that experience of my eye injury and everything it entailed, I feel mentally I will never again be the player that I was."
Kieswetter broke his nose and damaged his eye socket and cheekbone last July when a ball went through his protective grill while batting for Somerset against Northamptonshire.
He returned to action last September but realised his vision was still impaired.
South Africa-born Kieswetter made his first-class debut for Somerset in 2007 and was given clearance to play for England in 2010, going on to play 46 one-day internationals and 25 in the T20 format, keeping wicket and often opening the batting.
Kieswetter was also part of England's Twenty20 World Cup winning squad in the West Indies.
(Reporting by Martyn Herman; editing by Sudipto Ganguly)
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