In a Facebook posting, Simon, 76, said he would make a final tour - "Homeward Bound – The Farewell Tour" - of North America and Europe later this year. After that, the "Sounds of Silence" singer said he would do an occasional performance "in a (hopefully) acoustically pristine hall."
"I've often wondered what it would feel like to reach the point where I'd consider bringing my performing career to a natural end. Now I know: it feels a little unsettling, a touch exhilarating, and something of a relief," he wrote.
New York-based Simon said he came to the decision mostly because "I feel the travel and time away from my wife and family takes a toll that detracts from the joy of playing."
Simon's award-winning career includes a legendary partnership with singer Art Garfunkel. They released their first album in 1964 and went on to record classics including "Mrs. Robinson," "The Boxer" and "Bridge Over Troubled Water."
The duo split in 1970 and Simon launched a successful solo career with Grammy-winning albums like "Still Crazy After All These Years" and "Graceland."
Simon is the latest pop artist from the 1960s and 1970s to step back from touring. Elton John announced last month that he would be making a final three-year farewell tour, and Neil Diamond announced he was suffering from Parkinson's disease and would retire from touring.
(Reporting by Jill SerjeantEditing by Matthew Lewis)