The 34-year-old, who was capped 52 times, will hang up his boots at the end of the current A-League season.
"After much consideration, the choice for me is a happy one and something I am at peace with," he said.
"I am excited and committed to play out the rest of the current season, and hopefully achieve success with the group, knowing this will be my last with the football club."
Valeri joined Victory in 2014 having played professionally in Italy for a decade.
He was signed by Inter Milan as a teenager and went on to have stints at Grosseto, Sassuolo and Ternana before returning home.
Valeri captained his country at the 2001 FIFA Youth World Cup and won selection for the 2004 Athens Olympics.
At senior level, he played at the 2010 World Cup in South Africa.
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