The Chiefs announced the decision, with team chairman Clark Hunt saying, "his tireless work ethic and passion for the game made him one of the most productive defensive players to ever wear a Chiefs uniform."
Meanwhile, Johnson said he wants to continue playing in the NFL.
"I love Kansas City and this fanbase; they've always had my back. I'm grateful I had the opportunity to spend 13 years in a place I love," he said. "I plan on playing for several more years because I love this game so much, but I look forward to retiring as a member of the Kansas City Chiefs when my career is over."
The Chiefs selected Johnson with the 15th overall pick in the 2005 draft. He played each of the past 13 seasons with the franchise, racking up 1,151 combined tackles, 78 passes defended, 27.5 sacks, 23 forced fumbles and 14 interceptions across 182 regular-season games.
His impressive resume also includes four Pro Bowl selections and a First Team All-Pro nod in 2011.
In addition, the 35-year-old Texas native remained a reliable member of the Chiefs defense in 2017. Pro Football Focus rated him as the league's No. 33 overall linebacker.
Chiefs head coach Andy Reid noted in the announcement that Johnson's impact went beyond his on-field numbers.
"I'm grateful I had the opportunity to coach a player like Derrick," he said. "He's a passionate football player and a natural leader. I value the amount of quality work he put in every day for us, including teaching our younger players what it means to be a pro. I think he will make an incredible coach when he is done playing the game, if he chooses."
Looking ahead, Johnson figures to land with a championship contender on a short-term contract during free agency. The Philadelphia Eagles, Pittsburgh Steelers and Los Angeles Rams are among the teams that fit the description and also need a linebacker upgrade.