Niskanen, 33, had one year left on his contract at $5.75 million against the salary cap, which will come off the Flyers' books as a result of his retirement.
"Thank you to the Flyers organization for the opportunity to play in Philly last season," Niskanen said in a statement released by the team. "I'd also like to thank the fans for their support and lastly, I wish my teammates the best of luck."
Niskanen did not detail why he decided to hang up the skates.
Niskanen had 33 points in 68 games for the Flyers this past season. It was his first season in Philadelphia after being traded by the Washington Capitals, with whom he won the Stanley Cup in 2018. Niskanen has played 949 games in the NHL with 356 points for the Flyers, Capitals, Pittsburgh Penguins and Dallas Stars.
The veteran defenseman averaged 21:54 per game for the Flyers and played an important role as the defense partner for 23-year-old standout Ivan Provorov, who had his best offensive season on average in the NHL playing with Niskanen.
With the loss of Niskanen on the right side of their defense, the Flyers re-signed Justin Braun to a two-year contract with an average annual value of $1.8 million, down from a $3.8 million average annual value on his last contract. Incidentally, the two players share an agent.
These moves leave the Flyers with over $8.68 million in cap space heading into free agency, which begins on Friday.