The 40-year-old, who has made 12 appearances this season for the Cherries, retires having made 728 appearances, comfortably the most by any Bournemouth player.
And Fletcher, who made his final bow as a late substitute in the final game of the season at Tranmere, expects to remain at the Goldsands Stadium in some capacity.
"I have spoken predominantly to Eddie Howe, and also to the chairman Eddie Mitchell, and I don't want to just be a figure on the training pitch and not close to team selection," he told the club's official website.
"And after discussions with the gaffer, we have come to the agreement for me to go into something else at the football club and, hopefully, start a new chapter in my career with AFC Bournemouth.
"I could look at it as a massive negative but I want massively to turn it into a positive and just say, 'I have had a fabulous 20-year career at Bournemouth, 24 as a professional'.
"While my playing career at Bournemouth is ending, I want to be involved, in some department, with the success going forward with the manager and Jason (Tindall)."
Fletcher also played for Chesterfield, Crawley and Plymouth having begun his career with Hartlepool.