The 37-year-old midfielder said in a statement: "I've had an incredibly special time playing for the L.A. Galaxy, however, I wanted to experience one last challenge before the end of my playing career.
"I don't see this as the end of my relationship with the league (MLS) as my ambition is to be part of the ownership structure in the future."
His management on Friday denied he had plans to move to Australia's A-League though his decision to leave the Galaxy will prompt speculation over his next destination, with a return to England sure to be another option floated.
Beckham has spent six seasons with the Galaxy and in January signed a new two-year contract after winning the MLS title with the club.
The London-born midfielder was the first 'Designated Player' in MLS - a title covering the 'Beckham Rule' which allowed clubs to sign certain players outside of the league's strict salary cap rules.
"In my time here I have seen the popularity of the game grow every year. I've been fortunate to win trophies, but more important to me has been the fantastic reception I've had from fans in L.A. and across the States," said Beckham.
"Soccer's potential has no limits in this wonderful country and I want to always be part of growing it."
Both MLS and the Galaxy credit Beckham, who has maintained his celebrity status in the United States, with boosting the profile of the league and one of it's leading clubs.
"Seldom does an athlete redefine a sport and David not only took our franchise to another level but he took our sport to another level," said Tim Leiweke, president and CEO of Galaxy's owners AEG.
"There is no doubt that MLS is far more popular and important here and abroad than it was when he arrived.
"David has achieved great things on and off the field during his time with the Galaxy, and he will always be an important part of our history. We look forward to his continued involvement with the LA Galaxy and the League."
Beckham had an option in his initial deal with the league that allowed him to take a future ownership role in a franchise.
The Football Federation of Australia (FFA) said last week they had been contacted by Beckham's representatives about a move to the A-league.
Beckham's management company immediately responded with a statement saying he had no plans to play inAustralia.
Reporting by Simon Evans, editing by Nick Mulvenney/Peter Rutherford