The midfielder, 33, has made 669 appearances in 16 seasons, winning 31 trophies with Barca and three major tournaments for Spain.
Iniesta, who has been linked to a move to the Chinese Super League, has not said where he will play next season.
"I said I would never play against Barca so it is not going to be in Europe," he said.
"We will know at the end of the season - there are still things to talk about."
Iniesta has won the 2010 World Cup, Euro 2008 and Euro 2012 as well as four Champions Leagues and eight La Liga titles - soon set to be nine - with Barcelona.
"It is a difficult day for me to be here saying goodbye when I've spent my whole life here," he said in an emotional news conference watched by his family, team-mates and manager Ernesto Valverde.
Fighting back tears, he added: "A great deal of who I am, is down to Barca and La Masia - I am very thankful to them.
"I spoke to a lot of people - players, coaches - and I know what they want, but I tried to be honest with myself and the club."
Iniesta has been an integral part of the Barca team this season, scoring in the 5-0 Copa del Rey final win over Sevilla.
They have five games left this season and will wrap up the title if they avoid defeat by Deportivo la Coruna on Sunday.
He has spent his entire career with Barcelona and has made the second most appearances in the club's history - behind Xavi, his midfield partner of over a decade before his 2015 move to Al Sadd in Qatar.
Iniesta was magnificent in Saturday's cup final win over Sevilla, scoring an excellent goal and running the game before coming off to a standing ovation from both sets of fans.
"I want to be remembered as a great footballer and a great player," he said. "Because when our football days are over, that's all we are - people."