The former Penrith Panthers goalkicking half-back was in his second year with the Dragons when he sustained significant ankle-ligament damage in the third match of the 2018 Betfred Super League season at Hull KR on February 15.
Walsh has now taken the advice of several doctors to hang up his boots.
Catalans head coach Steve McNamara said: "It's always sad when a player has to retire early due to injury.
"Luke has tried everything possible to get himself into a position to play again but unfortunately that can't happen.
"His commitment and contribution to the Dragons is something we as a club really appreciate."
🇫🇷 Fin de carrière pour Luke Walshhttps://t.co/l0cpm8zJsR
— Dragons Catalans (@DragonsOfficiel) April 24, 2018
🇬🇧 Luke Walsh forced to retirehttps://t.co/kFHxpxUuXr pic.twitter.com/QfFvBXbTn1
Walsh enjoyed a distinguished career in the NRL where he made 140 appearances for Newcastle and Penrith, and was a high-profile capture for St Helens ahead of the 2014 season.
He made an impressive start to his Super League career, helping Nathan Brown's men top the table before breaking his leg and tearing ankle ligaments in a match at Widnes Vikings in July 2014.
Walsh feared at the time that his career was over and he was forced into a spectating role as Saints went on to win the Grand Final.
He made his comeback the following April before leaving the club at the end of 2016 to join the Dragons, initially on a 12-month deal.
Walsh missed only two matches last season and - after kicking five goals to help the Catalans to a victory over Leigh Centurions in the Million-Pound Game that secured their Super League status - he signed a new contract for 2018.
He scored 460 points in 63 appearances for St Helens and totalled 204 in 29 matches for the French club, with an 85 per cent success rate with the boot.
Sad when any player has to retire early - all the best for the future to the former Saint. #saintsandproud https://t.co/HQ19vbw1q1
— St.Helens R.F.C. (@Saints1890) April 24, 2018
Walsh said: "I would like to thank the club for the support since I arrived.
"I have made some good friends here and I'd like to thank the coaching staff, especially Laurent Frayssinous who recruited me to the club.
"I wish all the best to the boys for the rest of the year and for the future of the club."
