Schmeichel, whose dominating physical presence has intimidated many a striker, will be 35 next Wednesday and can no longer cope with the rigours of the English game. He now intends to pursue his career abroad while continuing to play for his country.
"I'm enjoying the game as much as ever but it's getting harder to keep pace," said the Danish international, who has helped United to 12 major honours since joining from Brondby in August 1991 for pounds 550,000.
"I need to train more than I have ever had to and in order to prepare myself properly, I need more time between games than I can get in England. I certainly need more than 12 days' summer holiday.
"Unfortunately, the demands of the game here mean that I cannot get the time I need, which is something I truly regret."
His manager, Alex Ferguson, said: "Peter Schmeichel has been a major player in the success achieved by Manchester United over the past eight years. He has been a model professional who has inspired and influenced everyone with Manchester United. It is his professional attitude that has led him to make this decision and, while I know it has been a difficult for Peter to make, I respect and fully support him."
Schmeichel has been troubled by a back injury this season, a problem which kept him out of two Premiership matches last month and led to doubts about his future at Old Trafford. He has also been guilty of some costly recent errors, notably his mistake in the last minute of his side's Champions' League game against Bayern Munich in September which allowed the Germans to equalise and cost United two points.
Schmeichel still intends to play for Denmark. "If I have time to prepare myself between games then I can put more years on my career," he said. "That will be good because I can't imagine myself not playing for my country." Despite speculation he will move to either Marseilles or Monaco in time for the start of next season, the player insisted he has yet to decide on his future.
"It is important that I am now allowed to concentrate totally on playing for United," he said. "I have had a fantastic career with United and I owe it to the club, players and fans to do everything I can to finish on a successful note."
Schmeichel's exit from Old Trafford will further weaken the link with the United sides of the early 90s and will leave Denis Irwin and the 24- year-old Ryan Giggs as the team's most experienced players.
Bosnich now appears to be the favourite to succeed Schmeichel between the posts at Old Trafford. Raimond van der Gouw, the current deputy for the No 1 shirt, is himself eight months older than Schmeichel and is not a long-term prospect, and United's other keeper is 20-year-old Nicky Culkin, who has yet to play a League match.
United have been tracking Australia's Bosnich - who will become a free agent in the summer under the Bosman ruling - and they will be keen to have a successor in place well ahead of Schmeichel's departure.
Bosnich, who by refusing to sign an extension to his contract has given no indication he intends to stay at Villa Park, could well be attracted by a move back to Old Trafford. When he left the Australian side, Croatia Sydney, in 1989, United was his first club in England. He played only three first team games before leaving for Villa in 1991, the year Schmeichel arrived, and made the goalkeeper's shirt his own.
Ferguson intends to move quickly to replace him. "We're going to have to move pretty soon but we're looking at certain situations," he said. Should any move for Bosnich fail, Ipswich's highly-rated England Under- 21 international, Richard Wright would be a leading candidate.Reuse content