Yzerman, who led the Red Wings to three Stanley Cup titles and spent his entire 23-year NHL career in Detroit, said he plans to stay with the organization while devoting more time to his family.
"I look forward to a future in the game of hockey with the Red Wings in some aspect," Yzerman said Monday as he announced his retirement at Joe Louis Arena -- his home away from home for years.
Red Wings general manager Ken Holland told Yzerman there is a front-office position ready for him. It's up to Yzerman to decide how much he wishes to take on.
"I've got the utmost respect for Steve's passion and his knowledge," Holland said. "How involved he wants to be from the family standpoint? Does he need a year away? Does he want to get in part time? But certainly I see Steve coming in."
Yzerman, known for rebounding from serious injuries, said his knee and other nagging aches and pains kept him from suiting up for another season.
"I knew my role over time was decreasing, and I was comfortable with that," he said. "But what I don't want to be is out there and not doing things that I want to do. ... I question my own ability to be effective out there."
Major knee surgery limited Yzerman to 16 games in 2002-03, but he came back the following season to score 18 goals and set up 33 others in 75 games. He managed 14 goals and 20 assists in 61 games last season despite tearing muscles three times.
During the 2004 playoffs, Yzerman had to be helped off the ice after a puck broke bones near his left eye and forced him into 4½ hours of surgery. After the lockout, Yzerman signed a one-year contract and returned to the ice donning a visor.
One of Detroit's most popular pro athletes, the soft-spoken player known simply as "The Captain" is the Red Wings' career leader in playoff scoring. He ranks first in assists and is second only to Gordie Howe in games played, goals and regular-season points.
Many former coaches and players were at Monday's announcement to show support for Yzerman, who was 18 when he joined the Red Wings in 1983.
"He's been a great Red Wing. He's been a humble Red Wing. He's been a leader by example," said Ted Lindsay, a Hall of Famer who helped Detroit win four Stanley Cup championships.
Yzerman played in 1,514 regular-season games, scoring 692 goals and tallying 1,755 points, sixth most in NHL history.
"The bigger the game, the better he played. You could always count on Stevie, that he was going to score a big goal," said Red Wings center Kris Draper, who played with Yzerman for 12 years.
Howe said Yzerman wasn't always the best player on the ice, but he knew how to be a leader.
"He wore that 'C' with pride," Howe said.
Yzerman had an effect on the game beyond Detroit. His achievements were recalled Monday by former Penguins star Mario Lemieux, a Hall of Famer who had his own retirement announcement this year.
"Steve was a great ambassador for the game of hockey and will be sorely missed," said Lemieux, who played with Yzerman when Canada won gold at the 2002 Salt Lake City Olympics. "Steve was a great leader, a great teammate and most importantly is a great person."
Yzerman said he swayed back and forth with his retirement decision after the end of last season.
The Red Wings had the NHL's best record in the 2005-06 season but fell to the Edmonton Oilers in the first round of the playoffs.
"I really enjoyed the season," Yzerman said. "It ended in disappointment, but that's the one great thing about sports in general. There's no predicting what's the outcome."
Holland said Yzerman made the decision on Friday -- the day before the free-agent shopping season began -- so Detroit could pursue players knowing that the captain wouldn't be back. He made up his mind quickly even though the Red Wings gave him until September to decide.
"You can't replace Steve Yzerman," Babcock said. "Some people are just blessed with the ability to be themselves, and that's unique. But that's who Steve was."
Yzerman said the devotion and effort of team owner Mike Ilitch and his family have made the franchise the powerhouse it is.
"Players have come and players have gone. Coaches have come and gone," Yzerman said. "The one biggest reason that this organization has been able to do well, has been successful and will continue to be successful is because the Ilitches will do whatever they have to do ... to make this organization successful."
A 10-time All-Star, Yzerman was picked for the NHL All-Rookie Team in 1984. He won the Lester B. Pearson Award, an MVP trophy chosen by the players, in 1989 and the Conn Smythe Trophy honoring the playoffs MVP in 1998.
Yzerman said his most cherished memories include hoisting the Stanley Cup three times above his head and having an Olympic gold medal put around his neck.
"I've enjoyed every aspect," he said. "My whole career has really been a highlight in that I've really enjoyed playing. At the age of 5 and before that I really wanted to be an NHL player. It's all I ever wanted to do."