The 38-year-old confirmed the decision on Wednesday after being appointed assistant coach to new Republic of Ireland manager Mick McCarthy last week.
Keane joined the Reds from Tottenham Hotspur in the summer of 2008 and scored seven goals in his 28 appearances under Rafael Benitez.
His first strike came in a Champions League tie against PSV Eindhoven before he netted in matches at Atletico Madrid and Arsenal as well as Anfield doubles past West Bromwich Albion and Bolton Wanderers.
Keane’s spell with Liverpool proved short-lived, however – a deal was agreed for him to return to Spurs midway through the 2008-09 campaign.