The 34-year-old forward - Canada’s most capped player - has bowed out on medical grounds following a series of head injuries.
He made 16 appearances for Knights after signing from London Welsh last January.
“After three concussions in a short period of time, it is with sadness that I announce my retirement from the game,” Carpenter told Knights’ official website.
“I wish I could have finished off this season with my team but it just wasn’t meant to be.
“I have had an amazing run in the game and consider myself fortunate to have had so many memorable experiences in my rugby career.”
He added: “I would like to thank Doncaster Knights’ owners, Tony de Mulder and Steve Lloyd, the coaching staff Clive, Glen and Paul for showing belief in me and pushing me to my full potential on a daily basis and also to the medical staff - Doctor Zain, Lindsay and Jess for looking after me in a difficult situation.
“I would also like to say a big thank you to all the passionate Doncaster Knights fans who were always a great support and a pleasure to chat with.
“I wish the team, who became my second family, all the best for the remainder of the season and now I look forward to the next chapter in my life. I hope to stay involved with rugby at some level.”
Director of rugby Clive Griffiths said: “We are devastated that Aaron has been forced to retire from the game in the nature that he has.
“I first came across Carps with Canada over ten years ago and not only has he become a very important player for me but also a good friend.”
“He has had a fantastic career at both club and international level, always leading by example with a faultless attitude.
“Whilst it is disappointing for Aaron you can not gamble with injuries of this nature and with a young family to think of I believe Aaron has made the right decision.
“I really do hope that Aaron stays in the game in some form, particularly in his native Canada where he has already played such a big part of their international development.”