The fullback began his professional rugby career at Llanelli Scarlets when the Region was formed in 2003. He made his Wales debut in 2005 when he came off the bench against New Zealand during their tour of the UK and Ireland. Byrne went on to make a total of 46 appearances for his national team.
In 2006, Bridgend born Byrne made the move to Ospreys and made 92 appearances for the Region before being called into the British and Irish Lions squad and won one cap during their 2009 tour of South Africa.
After his time with Wales during the 2011 Rugby World Cup, Byrne made the decision to move to high flying French side Clermont Auvergne. He made 63 appearances for the Top 14 side and also reached the finals of the Heineken Cup against Toulon but missed out on the win by a single point.
Commenting on his decision to retire, Byrne said: "This is a disappointing time for me but I'm looking forward to the future. I'm not sure what the next chapter holds or even what I want to do, but I am planning on taking some down time over the next few weeks to look at my opportunities - whether that's in rugby or a new career.
"I would like to take this opportunity thank my wife, family, and friends for their support over the years. I'm frustrated to be in this position but I'm happy to have enjoyed my time in the game having fulfilled all my rugby ambitions at both club and international level. I have made terrific friends and have had incredible experiences.
"I would also like to thank Lyn Jones for making me the Dragons Captain. I'm glad I had the chance to play a small part in this season's success and its great to know that I am leaving with the Region on a high, with such good things to come.
"Everyone at the Dragons has been very supportive with my care, the medical team and strength and conditioning team in particular. I'd like to thank them all for their support during the last few months and extend that thanks to everyone involved in the Region."
Director of Rugby, Lyn Jones added: "Lee is a fantastic rugby player and has been a great influence on many of our younger players.
"He will be missed both on and off the pitch, and I know that everyone here at Newport Gwent Dragons wish him all the best in the future."