Per Mertesacker will retire at the end of the 2017-18 season to become the new manager of Arsenal's academy, the club have confirmed.
The centre-back, who joined the Gunners from Werder Bremen in 2011, stated last month that he did not intend to finish playing with a year left on his contract.
The 32-year-old club captain is set to stay in Arsene Wenger's first team next season and "will continue as an important part of our squad while developing his knowledge and understanding of the academy", Arsenal said in a statement.
World Cup-winning defender Mertesacker will then take over his new non-playing role from Luke Hobbs.
"This is the start of an exciting new chapter for me and I am delighted that I will be able to stay part of the Arsenal family," he said. "This season I will remain fully focused on my job with the team and am looking forward to a successful last season on the pitch.
"After that, I look forward to the exciting challenge of helping produce young players good enough to play for the Arsenal first team."
Wenger added: "Per is an exceptional character who is a great example for young players. He is a deep thinker about the game and committed to helping players fulfil their potential. He will be an inspirational figure for everyone connected with the academy."
Chief executive Ivan Gazidis expects Mertesacker to instil a winning mentality into the Arsenal youngsters.
"At Arsenal, we believe in developing young players to their full potential and giving them an opportunity to shine," he said. "I am delighted that Per will take on this role.
"He understands the club's values, he knows what it takes to win at the top level and he will be the ideal person to drive the academy forward when he takes on the role next year."