The 37-year-old won 76 caps in an 11-year national team career and would likely have topped a century of appearances had it not been for injuries.
He grew a reputation as a powerful tackler, strong ball-carrier and expert at the breakdown, and was a major leader within the Springbok squad.
Vermeulen won the majority of his caps at No.8, but did also play as a flanker, including in the most recent World Cup win in France last month.
"Duane will forever be regarded as one of the real hard men of South African rugby – he was not only a formidable force for the Springboks but also a multifaceted player who consistently delivered his best," South African Rugby president Mark Alexander said in a statement on Wednesday.
"He was a leader who captained South Africa in four Tests, but he also retired as the most-capped Springbok No.8 with two Rugby World Cup winners' medals – a wonderful achievement for a player who will be remembered as a true legend of the sport."
Vermeulen has been linked with a move into coaching and did not discount it when asked recently.
"If you had asked me this a couple of years ago, I would probably have said no," he said. "But when you finish your playing career, you want to give back to the younger guys.
"If the opportunity arises, I would love to stay in the game. I love it and it is difficult to just step away when you have played professionally for 19 years."
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