Nonu joined Toulon after winning the Rugby World Cup in 2015.
"Toulon warmly thanks Ma'a Nonu for his involvement and commitment during these three seasons and wishes him and his family the best for the future," said Toulon on their website, with Nonu having played 77 matches during his time at the French side.
The 36-year-old centre scored 14 tries in 77 matches for Toulon, who lost back-to-back Top 14 finals in 2016 and 2017.
On social media Nonu said:
"I have decided to take a step back from rugby to spend time with my family and assess my options for the future.
"Toulon and its people will always hold a special place in my heart."
Nonu won the 2011 and 2015 Rugby World Cups with the All Blacks and earned 103 international caps.
He was unable to finish off his Toulon career with Top 14 success this season, with the club losing out to Lyon in the play-off semi-finals.