The 28-year-old played 138 times for the club and represented Scotland Sevens between 2006 and 2014, including last year's Commonwealth Games.
"A difficult time has been made easier as it's not been a decision," said Grant.
"You just have to get on with it, accept things and move on."
Grant joined Edinburgh in 2009 after beginning his Scottish rugby career as an apprentice with Border Reivers.
A recipient of the John Macphail Scholarship in 2008, he broadened his experience playing with Auckland University in New Zealand, having played through Scotland's age grades, and went on to be part of the Scotland A team that secured a 35-0 victory over England Saxons in 2012.
"It's been a pretty emotional time, having to come to terms with the fact I have to stop playing due to injury but I have no regrets," added Grant.
"I'm really proud of what I've done, what I've achieved and what I've contributed."
Head coach Alan Solomons said: "Roddy's retirement is a sad day for both the club and Scottish rugby.
"I've been fortunate, over the years, to coach some terrific young men; Roddy is right up there with the best of the best. His contribution to the club has been immense, both on and off the field. He is a leader of men and the ultimate pro.
"He has the heart of a lion, an unbelievable work-rate and he knew our systems and his role within them to perfection. Roddy never had a bad game. He is certainly one of the most consistent players I have ever coached.
"We will miss him - he is one of a kind."
Experienced Edinburgh flanker Roddy Grant has been forced to retire after failing to recover from a knee injury suffered at the end of last season.