Hart will be 37 when his three-year contract with the Scottish Premiership champions expires. He won 75 England caps and played 348 times for Manchester City, winning two Premier League titles.
Hart also played for a number of other clubs including Torino, Burnley and Tottenham before joining Celtic in 2021. "Joe has enjoyed a phenomenal career and I know will be huge miss to the game when he finally retires from playing football in the summer," said Celtic manager Brendan Rodgers.
"For all he has done in football, Joe deserves huge praise and congratulations. He has been such a brilliant asset to Celtic of course and the wider game at the highest levels, domestically and internationally.
"But more than that, he is a tremendous man, just brilliant to work with, someone who I know has been a great team-mate to so many throughout his career and a player who never gives anything but his absolute best."