Oberto, in his sixth year in the NBA, was signed as a free agent by the Blazers one day before the start of the season to help the frontcourt while centers Joel Przybilla and Greg Oden heal from knee surgeries.
Oberto experienced dizziness in Portland's game against the Milwaukee Bucks on Tuesday.
"I made this decision to put my health and my family in front of basketball," Oberto said in a statement. "It was a tough decision to make after playing for so many years, but it was the right one."
Oberto, a native of Argentina who played on the team that won the gold medal in the 2004 Athens Olympics, played in each of the first five games for the Blazers, averaging 1.4 points and 1.4 rebounds in 9.0 minutes.
Blazers coach Nate McMillan said he understood the decision.
"It wasn't worth the risk of something serious happening," he said.
Oberto played for four seasons with San Antonio, starting at center for the Spurs' NBA championship team in 2007. He spent last season with the Washington Wizards.
He has averaged 3.2 points and 3.5 rebounds in 14.5 minutes over 336 career games, including 128 starts.
He was used off the bench to help Marcus Camby, who has served as Portland's starting center in the absence of Oden and Przybilla, who were both injured last season and required surgery.
Przybilla has already started contact practice and is expected to be back by Thanksgiving. There is no timetable for Oden's return.
McMillan said Przybilla's return would not be pushed up in light of Oberto's retirement.
"We just have to be patient, we really do, and not put him at risk," McMillan said.
The Blazers will look outside for help at center, he said.
The Blazers had planned this season to back up Camby with second-year forward Jeff Pendergraph. But Pendergraph was injured in the preseason and required season-ending surgery. The Blazers waived him.
Portland also announced Thursday that rookie guard Elliot Williams would have surgery to repair a dislocated right patella. He will likely miss the rest of the season.
The team knew Williams would eventually need surgery, but he wanted to play on it while he could, McMillan said. Williams was sore after practice on Wednesday.
Portland selected Williams with the 22nd overall pick of the draft this June. He averaged 17.9 points, four rebounds and 3.8 assists as a sophomore at Memphis last season.