The 34-year-old officially communicated his decision to Cricket Association of Bengal president Sourav Ganguly.
"He met me and we will call a news conference on Thursday to announce his retirement," Ganguly said.
Once Bengal's leading offspinner, the 34-year-old was dropped last season and did not play a single match with the state roping in former India leftarm spinner Pragyan Ojha.
Lahiri has claimed 256 wickets from 100 First Class matches with best figures of 7/62.
He has also played 76 List A and 22 Twenty20 matches in his stint with IPL franchise Kolkata Knight Riders and Bengal.