Totti had been given the chance to play on, with Tokyo Verdy in Japan's second tier among the clubs to make offers to the 40-year-old midfielder.
But Totti, who made 786 appearances for Roma in all competitions, scoring 307 goals, and won the Serie A title in 2000-2001, will now become a director at the Stadio Olimpico.
"The first part is over, that of a player, and now begins another important assignment as a director, where hopefully I can have a similar impact as I did on the pitch," Totti told Roma TV.
"I start at the beginning, now goes a new phase and a new adventure. I have had this time to think about things, to reflect and truly decide that I am ready to continue serving this team, day after day, with calmness and confidence, to learn the role and add something new above all.
"I will try to be available in 360 degrees, from the youth sector to the president [Jim Pallotta]. Then it is normal that it will take a while - six months, a year, two years, I don't know - to truly find my real and best role.
"I am looking forward to something bright, something beautiful: finding my perfect role, doing what I can to help make a great squad and a brilliant club.
"When you change your role, you always need to take a while to get to know better the situation you are walking into - but I am fortunate enough to already know very well the atmosphere around the club and the city. The doubts are only about what exactly I want to do to achieve something great.
"At this moment the details are not precise, I don't want to have a specific role - I want to be everything and nothing. I want to be an important person for Roma, and Roma really understand that's what I want to do."
Although Totti does not yet have an official job title in his new role, he is keen to work alongside Roma's new manager Eusebio Di Francesco, sporting director Monchi and president Pallotta.
"I spoke with sporting director Monchi, we had a great chat and took the time to get to know each other better," Totti said.
"I also talked with Pallotta, especially about small things that were not clear from discussions in previous years.
"But we made everything clear, we talked calmly and afterwards we were both happy with our conversations. Now we want to do what we can to take this team as high as possible.
"I have long had a great relationship with [Di Francesco]. I also saw him a lot when he was not the Roma coach. He's a great person, a top man and I am sure he will bring a lot to this team."