The 30-year-old told teammates of his decision amid their flag celebrations, following last Saturday's 60-point thumping of Sydney in the grand final.
Speculation had swirled about Daniher weighing up his playing future since the eve of the season decider.
Daniher had remained tight-lipped in the days following his influential performance in the Lions' victory, where he kicked 2.4 from 16 disposals.
News of his decision to retire after 204 games came to light on Thursday.
Daniher played 96 games for Brisbane after joining the club for the 2021 season.
He played 108 games in eight seasons at Essendon, having been drafted under the father-son rule.
His father Anthony Daniher played 118 games with the Bombers and 115 with the Swans.
Joe Daniher (r) shares a moment with Charlie Cameron during the Lions' grand final win. (James Ross/AAP PHOTOS)
Daniher enjoyed a stellar individual finals series as the Lions won four straight games to become only the second team to win the flag from outside the top four under the current finals system.
The key forward kicked eight goals in four cut-throat finals and stepped up in the ruck when Oscar McInerney was injured in the preliminary final.
Daniher's retirement ensures a remarkable AFL streak will continue; no premiership team has ever played together again in its entirety after their grand final victory.
Brisbane will also be without Murray Davis next season after the long-time assistant coach departed to take up a newly created role as Adelaide's coaching director.
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