Vernon, 31, was part of the Glasgow Warriors side which won the Pro12 title in 2015.
He left Scotstoun last summer to join London Scottish where he has combined playing in the English Championship with a job as an analyst with Aberdeen Standard Investments.
However, he has decided to call time on his playing career at the end of the current campaign.
Vernon said: “After 13 years of professional rugby I know the time is right to hang up the boots. It’s been an incredible experience and one that has allowed me to realise the dreams I had as a young man in representing Scotland and winning a league title with the Warriors. After working for Aberdeen Standard Investments this season, now is the time for me to build my new career in the city and I am really excited for the challenge.
“I’d like to thank my wife Sophie and my Mum and Dad for their support throughout my career. I’ve been lucky to play for some great clubs with outstanding players, coaches and support staff and I have memories with them that I can treasure for life.”
Vernon was capped 24 times by Scotland. He went to the 2011 World Cup in New Zealand as a No 8 and was then picked for the 2015 tournament in England as a centre after undergoing the conversion to back due to the surfeit of back-row forwards at both Glasgow and Scotland.
He was the first Scot since the 19th century to be capped as both a forward and a back.
His last cap was as a replacement against Australia in the titanic World Cup quarter-final at Twickenham which saw the Scots lose 35-34 in agonising fashion due to a contentious late penalty.
Dundee-born Vernon began his pro career with the now defunct Border Reivers before heading to Glasgow Warriors in the first of two spells where he made just under 100 appearances in nine years.
In between has had a spell with Sale Sharks in the English Premiership.
This season Richie has been a focal point for London Scottish, playing 14 times, captaining the side on a couple of occasions.
London Scottish director of rugby Dave Morris said: “London Scottish are very proud to have had Richie with us this season and to be helping with his transition to life after rugby.
“Richie’s contribution goes so much further than just on the field. He is a humble guy considering all he has achieved in the game. He has had a massively positive effect around the club.”