Sa'aga, who grew up in Melbourne before going onto make his Super Rugby debut for the club, was contracted through to 2022 but decided it was time to walk away.
In an announcement on the Rebels website on Wednesday, the club said the prop had been wrestling with balancing rugby and his faith as a Seventh-Day Adventist.
Sa'aga said he was grateful to have the opportunity to play rugby in his hometown.
“It was super special – becoming a Rebel was always a goal I set out to achieve when I left school,” he said..
“It’s just an incredible feeling to be part of history being one of the first local boys to put on the jersey and represent the city.
“It’s also special, when thinking of all the players who are part of the rugby community that aspire to be a professional athlete - it means a lot to me and it’s truly a blessing.”
“Thank you so much for the cooperation of the Melbourne Rebels, it has been a smooth transition for me (to retirement). Thank you so much to the fans, and all my coaches, and my friends and family who have been with me along this journey, since day dot.”
Rebels CEO Baden Stephenson paid tribute to Sa'aga and his influence on the club.
“Fereti has been a real trail blazer for the Rebels and he has been a great role model young Melburnians," he said.
"We are very proud of the player and person that he has become and he will always be a special part of our club
“This is obviously a very unique situation and Fereti has been really open with us over the last year with his feelings towards his rugby and his faith. I know from speaking with him that he has a sense of peace having made this decision and that he can move forward knowing that he can fully serve his faith and respect the seventh day, which had been playing on his mind.
"As a club, we have supported and been flexible with Fereti and he was certainly a part of our plans for the next couple of years. At the same time we absolutely respect his wishes and this very sincere decision that he has made.”