Carlisle made his debut for Blackpool in 1997 and went on to make over 500 appearances, also representing QPR, Leeds, Watford, Luton, Burnley, Preston and York.
The 33-year-old's final game was last Saturday as the Cobblers were beaten 3-0 by Bradford in the League Two play-off final at Wembley.
Carlisle's decision came as a shock to his club manager Aidy Boothroyd.
"Clarke's decision was a bit of a surprise," Northampton boss Boothroyd told the club's official website.
"He has done well for us, he was part of team who got us out of trouble last season and who took us on this season. He has been strong for us and he formed a formidable partnership with Kelvin Langmead.
"He is a leader and an organiser and for him it is about moving on to the next chapter of his life.
"We wish him well, I am grateful I have been able to be his manager and for the contribution he has made, not just to Northampton Town, but to football in general."