Mr Barenboim said the decision was made with "a combination of pride and sadness.
"I have lived all my life in and through music, and I will continue to do so as long as my health allows me to,” he went on.
Born to Argentinian Jewish parents in 1942, Mr Barenboim moved to Israel aged 10.
He rose through the ranks as a young pianist and has conducted some of the world’s most prestigious orchestras.
In 1967 he married British cellist Jacqueline du Pré at the Western Wall in Jerusalem. Following du Pré’s death, he remarried Russian pianist Elena Bashkirova.
Mr Barenboim is known for his criticism of conservative Israeli governments, and in 2008 he became the first person to hold both Israeli and Palestinian citizenship.
In 1999 Mr Barenboim co-founded the West-Eastern Divan Orchestra, a Seville-based orchestra of young Arab and Israeli musicians.
