The 32-year-old had been struggling with injury for over a year, with his last appearance for the Pars coming against Brechin City in late December 2017. However, he has recently returned to full fitness.
The former Scotland Under-19 international announced his decision to hang up his gloves on social media this afternoon.
Murdoch wrote: “As many know, I have been injured for a period of around 15 months. Luckily for me, and with thanks to Dunfermline, I am fully fit, healthy and have been for the past few weeks.
“Injuries can be quite challenging at times but with the right club, family, friends and team mates then any challenge that awaits you can be diminished quite quickly.
“I came to my decision around a month ago and informed the manager - who has been very supportive - that I would be retiring from football at the end of the current season and don’t want to be considered for next season.
“After being a professional footballer for more than half my life, the decision wasn’t taken lightly.”
Murdoch has been a qualified official since the age of 21, working his way up through the ranks.
But he revealed his refereeing career stalled once he reached Category 3D level in 2013/14 as there would be “a clear conflict of interest with playing and refereeing”.
He continued: “I am happy to say I will be going straight back into officiating as early as next season.
“The SFA and Glasgow Referee Association have been very supportive towards me. We have some fantastic officials in this country and I am thoroughly looking forward to the challenge of working hard and trying to reach the very top.
“Thank you to all the clubs I played with, to all the friends I have met, and I wish every person the best of luck with their lives”.
Murdoch joined Hibs in October 2012, initially on a short-term deal to provide cover for Ben Williams and allowing youngster Calum Antell to go out on loan.
He left Easter Road in the summer of 2014, eventually joining Rochester Rhinos in the United Soccer League in America before returning to former club Dunfermline.
Murdoch, who started his career with Hearts as a teenager, also turned out for Forfar, Hamilton and Accrington Stanley.