The 28-year-old joined Hampshire in July following his release by Derbyshire, having previously also played for Nottinghamshire.
Carter took 170 wickets across all formats and his final game was against Yorkshire earlier this month.
"It's the right time for me to move to the next chapter and I'm excited about it," Carter said.
Seam bowler Andy Carter has announced his retirement from first-class cricket after a seven-year career.