The 36-year-old has won 14 major honours at Stamford Bridge after making his first-team debut in 1998, having risen through the youth ranks.
Terry has been a bit-part player for the Blues this season, featuring in just five Premier League games for Antonio Conte's league leaders.
In a joint announcement with the club, former England captain Terry said he remains committed until his contract expires and insists he has no plans in place beyond that point.
"I will decide on my future in due course, but for now I am committed to helping the team achieve success this season," he said.
'After 22 years there is so much to say and so many people to thank at this great football club
From coaches, team-mates and staff to the fans who have given me so much support down the years, I can't thank you enough.
"There will be opportunities for me to speak further about this over the coming weeks."
Terry has lifted four Premier League titles during his time in west London as well as five FA Cups and a hat-trick of League Cups.
He also won the Europa League under Rafael Benitez and lifted the Champions League trophy in 2012 despite being suspended for the final against Bayern Munich.
In announcing his decision to leave, Terry suggested he will one day return to Stamford Bridge.
"The club and I have always had a fantastic relationship, which will continue beyond my playing days," he added.
"We had some really positive talks but with everything taken into careful consideration I have decided it's the right time for me to leave.
"I've always been conscious that I depart at the right time, in the right way, and I feel that the end of this season is the right time for the club and I.
"I feel I still have plenty to offer on the pitch but understand that opportunities here at Chelsea will be limited for me.
"I'm eager to carry on playing and so will be looking to continue with a new challenge
I will of course always be a Blue and am desperate to end my final season as a Chelsea player with more silverware."
Terry has not featured since a 2-0 FA Cup win over Wolves in February, with his last league appearance coming in November.
Other than a loan spell at Nottingham Forest, Terry has never turned out for another side and has racked up over 700 appearances at Chelsea.
He was named PFA Player of the Year in 2005 and collected 78 England caps before retiring from the international scene.
Source : PA
Source: PA