Injured Ashton forced to retire
Ashton has undergone several operations since picking up the injury in an England training session.
"This is a sad day and our thoughts are with Dean," chief executive Scott Duxbury told West Ham's website.
"I would like to place on record our thanks to him for all his efforts and wish him the very best. I would also like to thank the fans for their patience and understanding during what has been a difficult time."
Ashton joined West Ham for 7.25 million pounds from Norwich City in January 2006 and made one appearance for England.