Botha recently helped Toulon to win the Top 14 title as well as the Heineken Cup. He was also part of the Toulon team during their 2013 Heineken Cup success.
"I do have the offer to extend my current contract, but I've already made up my mind," Botha told the My Players website.
"This will be my last season as a Toulon player. That will be the end of Bakkies Botha.
"My career has been given a new challenge in France, which is refreshing. I've had the opportunity to train and learn from world-class players, like Jonny Wilkinson, Matt Giteau and Carl Hayman.
"It's amazing to see their strong work ethic at training. It inspires me to put in hard work.
"Toulon is also a proud rugby city. The players work hard to ensure we bring silverware back to the fans. It's also been great sharing this experience with South African colleagues, like Bryan Habana, Danie Rossouw, Juan Smith and the others (there are seven South Africans in the Toulon squad).
"Hopefully, we can achieve more success as a club going into my final season."
The 34-year-old also returned to the Springbok Test side last year and caught the eye recently with his physicality on defence and attack during the June internationals. He has also impressed in a mentoring role for the Springboks' younger and less experienced locks.
Botha is keen to retire at next year's World Cup in England.
"If (Springbok head coach) Heyneke Meyer feels that he needs me in the Springbok squad, then I'll be more than happy to be part of the team at the next World Cup," added Botha.
"It's always an honour being part of the Springbok squad. In saying that, I don't want to be in the way of the younger players.
"There are talented young locks in South Africa, like Eben Etzebeth and Lood de Jager, who proved himself against Wales and Scotland. If it's meant to be, it will happen."
Botha was also reunited with long-term lock partner Victor Matfield at Springbok level last month. Matfield has also impressed at Super Rugby and Test levels since coming out of retirement at the start of the season.
"Many people were sceptical when Victor returned to the field at the age of 37, but I knew from day one he was still going to add a lot of value," said Botha.
"There's no substitute for experience.
"It's been great being able to play alongside him too. Everybody thought that the 2011 World Cup was the last of the Victor-Bakkies partnership, but we will continue to give our all to the Springboks when needed.
"We also pass on our experience to the youngsters whenever possible. Yes, it's great to pass on words of congrats to players via social media, like Twitter, but that time we get to spend with them one-on-one is invaluable.
"We teach them things like line-out jumping, scrumming, where to position themselves in different situations and the finer details of the game.
"Heyneke is doing a great job. He's setting great structures in South African rugby. There's a great mix of experience. Seeing young guys like Jan Serfontein and Oupa Mohoje coming through is testament to the work he's putting in behind the scenes. Springbok rugby is very healthy."