The 34-year-old would have been the oldest player in the engage Super League, but feels that it would too much for his body to go through another year of rugby.
"I've had enough and I don't think my body will hold up next year," said Bai. "I really wanted to win a Grand Final with Bradford but some things don't work out."
"I found it hard to get in for training every day this year if I'm honest," added Bai. "I've given everything though. I didn't think anyone would pick me up when I left Leeds but Bradford did and I've really enjoyed it there.
"I want to finish while my body is still in one piece. I don't want to come back, play four games, get injured and miss the next 26. That wouldn't be fair on the fans and it would be a waste of money."
Bair made 26 appearances for the Bulls, including his double try-scoring debut in the World Club Challenge against Wests Tigers, and scored a total of 12 tries at the club.
"It's a blow. He scores tries, creates opportunities and works hard," said Bulls coach Steve McNamara.
"We'll miss him but he's been honest with us. His wife's just had a baby and he didn't feel his body would stand another season. He's been fantastic both on and off the field.
"It does leave us in a tricky situation but we'll monitor things and see where we go from here. It's going to give somebody else an opportunity and we still have a very strong squad."