"I've had the hip trouble and it's been limiting what I've been able to do on the training ground," he told the club's website.
"All good things come to an end and with it being nearly 40 years since my debut and with my testimonial coming up, it's as nice a time to go as any.
"It's my time as a player that I'll treasure more than anything else. To be an Everton supporter and go on to play almost 400 games for the first team means more to me than anything and that's what's given me the biggest satisfaction.
"To win the championship and the FA Cup as an Everton player was tremendous."
Harvey has most recently been responseable for Everton's youth team, and has had more to do with the progress of Wayne Rooney than anyone else.
I'd liek to take this oppotunity to thank Colin Harvey for over 40 years service to the club, as player, assistant manager, manager and coach. Noone deserves a long and peaceful retirement better.