The 32-year-old announced the news to his team-mates at Wantage Road on Wednesday morning, before the club made the official announcement.
Wakely made a total of 371 appearances for Northants across all formats in his 16 years at the club, scoring more than 12,000 runs in the process.
He also captained the club for six years, and recorded great success as he led the team to T20 Blast title glory on 2013 and 2016.
He is the only Northants skipper to have won two major titles.
“Northamptonshire Cricket Club has been my life since I was 13 years old and although this decision was extremely tough to make, I am excited about starting the next chapter in my life," said Wakely.
“I’ve thoroughly enjoyed my career and I’m hugely grateful for my time in the game.
"I have had many highs and many lows along the way, but I have always given 100 per cent to Northamptonshire Cricket.
“I can’t thank the club enough for all the opportunities they’ve given me over the years, and in particular head coach David Ripley who has helped, encouraged and supported me throughout.
"He has become a friend rather than a coach and somebody who I have the upmost respect for."
Wakely was fully involved in pre-season this year, and played in the opening LV= Insurance County Championship match of the campaign against Kent at the beginning of April.
That County Ground outing proved to be his final one for the club.