The Banff-born Scot took a head knock in a game against South Sydney in July last year.
Since then, the 30-year-old has not played at all, and medics have advised the former NSW State of Origin winger that he needs to call time on his career.
“It is obviously a difficult decision but a decision I made for my young family,” McManus said, according to TripleM.com.
“I could never have dreamed that when I moved from the Northern Territory to Newcastle, that I would have got to play one game let alone playing the game I love for 10 years.
“I am very privileged to have played my whole career at the one club and I am very honoured to have worn the Newcastle Knights jersey.”
After working part-time for the club this year, McManus will move into a full-time business development role with the Knights in November.