Parsons,34, has played 115 games for the Auckland based franchise and sits behind only Keven Mealaumu, Jerome Kaino and Tony Woodcock on the list of most capped players for the franchise.
He made his debut against the Highlanders in 2012 and play 106 matches for North Harbour.
Parsons made his international debut against Scotland at Murrayfield in 2014 and was recalled for a second test against Australia in Wellington two years later.
Parsons, said he's retiring on medical advice, after being out of the game for several months due to a head injury.
"For me it's not about sadness it's about celebration. I've been very fortunate to represent my two home teams The Blues and North Harbour Rugby over a undred times each which is a dream come true, and to play two tests for the All Blacks is something I'll never forget.
"I've studied and gained a number of skills on and off the field throughout my whole career that will transfer into the next stage of my life....one thing for certain is that I love this game and will be staying involved and looking forward to the opportunity to give back.
North Harbour CEO Dave Gibson said "JP is the sort of person every union wants and needs...his contribution cannot be measured."
Concussions and their long-term effects have been in the spotlight since former players filed a class-action lawsuit against governing bodies World Rugby, England's Rugby Football Union and the Welsh Rugby Union which alleged a failure to protect them from the risks.