The Spain international broke down in tears at Barca's training ground with all his team mates present and a packed press room burst into applause when he finished his opening statement.
"This is my last season here. This is a decision I have thought about for a very long time and have considered a lot, thinking about myself and my family," Iniesta said.
"I understand that after 22 years here I know what it means to be a player for this team, which for me is the best in the world."
Spanish media reported Iniesta will sign for Chinese club Chongqing Dangdai Lifan next season.
"There are still things to sort out and everything will become clearer at the end of the season but I have always said I would never go to a team that competes with Barcelona," he added.
Iniesta has spent all of his senior career at Barcelona and is their most decorated player ever along with Lionel Messi, having lifted 31 trophies, which is soon to be 32 if Barca clinch the league title on Sunday at Deportivo La Coruna.
"I don't want to fool anyone. In a few days I will turn 34. I have squeezed myself for this club and I think the moment has come to leave," added Iniesta, who has remained a key player this season but does not usually complete 90 minutes.
"I know myself and I understand that from now on everything was going to be more of a struggle and I have given everything to this club and I wouldn't feel happy if I felt that I couldn't give everything, as I have been able to up to now."
STANDING OVATION
He was given a standing ovation by both sets of supporters when he was substituted after putting in a virtuoso display and scoring in a 5-0 win over Sevilla in Saturday's King's Cup final.
The midfielder is one of the most loved footballers in Spain after he scored the only goal in the 2010 World Cup final when they beat the Netherlands to lift the trophy for the first time.
He is also remembered for his touching tribute to his friend, the late Espanyol player Dani Jarque, after scoring the winning goal, ripping off his shirt to reveal a t-shirt saying "Dani Jarque, always with us."
He also won the European Championship in 2008 and 2012 and is routinely given a standing ovation at every ground he plays for Barca. He even gets a positive reception when playing at hated rivals Real Madrid.
UNIQUE MOMENTS
"I've been here for many years and had many great experiences. There's been many trophies, many unique moments," he said before adding his belief that Barca would continue to thrive in his absence.
Born in the village of Fuentealbilla in Albacete province, Iniesta moved to Barcelona's youth academy in 1996, aged 12.
He later described the day he joined the academy as the worst moment of his life, due to the pain he felt at being apart from his family.
The sacrifice, however, paid off as he became one of the club's best ever players, going on to make 669 appearances in all competitions, making him the club's second longest serving player behind Xavi Hernandez, his fellow puppet master in midfield who left the club in 2015.
He has won four Champions League titles, six King's Cups and eight La Liga titles.
He will be part of the Spain team at this year's World Cup in Russia, after which he is set to retire from international football.
(Reporting by Richard Martin; Editing by Toby Davis and Christian Radnedge)
