On Thursday, Cowboys head coach Jason Garrett told reporters Paea is retiring due to a knee injury that is "preventing him from playing at the level he wants." Paea missed Week 5 due to the injury.
ESPN's Adam Schefter reported Paea informed the Cowboys on Wednesday of the decision.
The Cowboys signed Paea to a one-year deal in March. He started each of the first four games in 2017, recording four total tackles, before missing the matchup against the Green Bay Packers.
During his college career at Oregon State from 2008 to 2010, Paea won the Morris Trophy as the best defensive lineman in the Pac-10 in 2009 and 2010 and was named Pac-10 Defensive Player of the Year in 2010.
Paea was a second-round draft pick by the Chicago Bears in 2011. His best season came in 2014 when he set career highs with 16 starts, six sacks, two forced fumbles and 33 total tackles.
Paea appeared in 83 NFL games with four teams and recorded 129 total tackles with 14 sacks.