Penrith captain Peter Wallace has announced his retirement from rugby league.

Wallace, a veteran of 240 NRL games with the Panthers and Brisbane Broncos, will join the club's coaching staff after suffering from a chronic knee injury in the back end of his career.

The hooker and scrum-half, 32, has remarkably played the last two seasons with no ACL in his knee after failed reconstructions, and Penrith general manager Phil Gould paid tribute to the club great and his courageous decision.

"Peter Wallace has informed the club and his team-mates of his decision to retire, effective immediately,'' Gould said in a statement.

"It's an incredibly selfless act from Peter. He always had great faith in the young players coming through our system here at Panthers and has played a huge part in their development as both footballers and people.

"Peter has been battling with injury for several years and has repeatedly played for the club with injuries that would keep the normal man home in bed.

"It can now be revealed that Peter has played the last two years with no ACL in his knee after his last knee reconstruction actually failed. Management and coaches knew of his condition, but he didn't want anyone else to know.

"I can also remember him staying on the field for 50 minutes in a game where he had completely torn his ACL. He is a tremendously tough individual and his leadership has been wonderful for our club.

"Peter will immediately take up a position on the coaching staff in our club. His experience and relationship with our players will be a wonderful asset for our program at Panthers. I can see Peter enjoying a long-term future in coaching at Panthers.''

Wallace represented Scotland and New South Wales and also made two City appearances.