The 30-year-old suffered a pelvis injury playing for the region against Treviso earlier this year and has been unable to resolve the problem.
“Playing for the Blues was one of the highlights of my career and I will always be grateful for having the opportunity to represent the region and for the level of support they have shown during my time with them as a player, especially during this recent injury,” said Mustoe.
“It has been difficult being forced to finish through injury. I’ve always enjoyed playing rugby, regardless of whether I was a professional or not and I would have continued for as long as possible.”
Mustoe started his career at Bridgend RFC before the formation of the Celtic Warriors. He then moved to the Ospreys and had a season long loan spell with the Dragons before joining the Blues with fellow wing Aled Brew in the spring of 2008.
He scored a hat trick of tries on his debut for the Blues against a combined Blues Regional Premiership team in August 2008, at Sardis Road
Mustoe added: “Fortunately I’ve been kept busy relocating my business, Porthcawl Funeral Services which has certainly given me something to focus on.
“Although I have been full time as a professional player, I have also continued with my career as a funeral director.
“It was always my intention to continue as an undertaker full time, just maybe not as early as this.
“I have also had the opportunity to do some coaching with Maesteg RFC and I am working towards attaining a WRU level three coaching award.”