Michu, the forward who helped Swansea win the League Cup in 2013, has been forced to retire at the age of 31.
Spaniard Michu top scored for the Swans with 22 goals in his first season after a £2m move from Rayo Vallecano in 2012.
However, within two years of helping Swansea finish ninth in the Premier League, he was playing fourth-flight football in Spain after a recurring ankle injury.
Michu spent the 2016-17 season with Oviedo and plans to move into coaching.
“The current state of Michu’s right ankle makes it very difficult for him to take part in any sport,” said a spokesman for the player.
“He now finds it impossible to continue his profession as a footballer. After seeking medical advice, he has decided to abandon the sport. He will instead pursue a career in coaching football.”
After starting his career with Oviedo, Michu played for Celta Vigo before joining Rayo Vallecano, and was capped once by Spain in 2013.