Molly joined the club last summer from Southampton and went on to make 23 appearances in all competitions, scoring three times.
The midfielder featured for England at youth level from under-17s through to under-23s, including captaining the side at under-19s level.
She has also played for Everton, Bristol City and Leicester City in the Barclays Women’s Super League, making 67 appearances across those three clubs in the top flight.
On making the decision to retire, Molly said: “I’m incredibly proud to have represented Newcastle United and this isn’t a decision I have taken lightly.
“Choosing to step away from football isn’t a reflection of my time at the club, it’s an entirely personal decision I have made in order to prioritise my own wellbeing.
“I’d like to thank everybody at the club who has made me feel so welcome and supported me throughout my season here – I wish you all every success in the future.
“I also need to mention the fans, who have been incredible home and away throughout the season. Your passion and dedication following us around the country and being right behind us every game is something I’ll never forget.”
Tanya Oxtoby, Newcastle United Women’s Manager, said: “We are naturally disappointed to lose not only a player of Molly’s quality, but what she brings to group off the pitch as well.
“I have really enjoyed my time coaching Molly. It has been clear to see why she has had the career she has, and she should be proud of that.
“We are all here to support Molly as she begins this new chapter in her life and wish her the very best for what comes next.”
Grace Williams, Director of Women’s Football, said: “Molly should be proud of the career she has had, and while we are disappointed to see her go, we understand and respect her decision.
“As a club, we will continue to support Molly as she steps into the next stage of her life and thank her for her commitment during her time with Newcastle United.”