The 27-year-old, contracted for 2024 on an estimated $750,000-per-year contract, has informed the Bulldogs of his desire to focus on family and fighting.
The Tongan international will play out the remainder of the season before swapping his boots for gloves.
Pangai has twice fought professionally and holds a 2-0 record, first defeating Gerico Cecil by technical knockout in December 2021 and then knocking Jerry Tupai out last December.
"We would like to thank Tevita for his contribution to the club," said Bulldogs football boss Phil Gould.
"We are well aware of his talent as an athlete and are fully supportive of his decision to pursue another sport at the season's end.
"We wish him and his family all the best for the future."
The rugby league retirement continues a whirlwind year for Pangai, who was selected to make a surprise NSW debut in the State of Origin series opener.
He was dropped for the second game of the series and has since struggled for consistent form with the 15th-placed Bulldogs.
At his best, Pangai was one of the most damaging forwards in the game.
Pangai burst onto the scene with Brisbane in 2016 after a decorated career in the U20s with Canberra.
Following a mid-season switch to Penrith, he was pivotal in their charge to the 2021 grand final, a victory he ultimately missed through injury.
Pangai's exit will free the Bulldogs to go to the market as they continue their rebuild under coach Cameron Ciraldo.
Canterbury's other marquee front-rower Luke Thompson is off-contract at season's end, with the Bulldogs in desperate need of starch in the middle of the park.
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