Varner, 30, said he'd been considering retirement well before making it official. The loss to Dober was his fourth in a row and fifth in six fights. He suffered back-to-back knockout losses earlier this year.
The fight ended at 1:52 of the first round, when Varner tapped to a rear-naked choke moments after it appeared he hit the back of his head while trying to throw Dober to the floor.
"It was bittersweet how it all went down," Varner said. "I haven't seen the replay and I don't really remember anything, but I guess I knocked myself out. I can't keep up with these guys anymore.
"I didn't tell too many of my training partners because I wanted them to focus on the fight. I told my family about six weeks ago. I've done everything I wanted to do in this sport and my next move is to coach and inspire these up-and-coming athletes and make this sport better."
Varner (21-11-1) held the 155-pound WEC title from February 2008 to January 2010. He defended the belt twice, including a technical split-decision win against Donald Cerrone. The fight ended in the fifth round when Varner couldn't continue after absorbing an accidental illegal knee by Cerrone, sparking a rivalry between the two.
He forfeited the title at WEC 46, in a submission loss to Ben Henderson. Varner went winless in his next three fights and did not join the UFC roster in late 2010, when the WEC's roster was absorbed by the promotion.
The UFC picked up the Arizona native in May 2012 for a short notice bout against Edson Barboza. Varner won an upset decision in the fight, but only collected one more victory in his next six trips to the Octagon.
A former junior collegiate wrestler, Varner made his professional debut in March 2003.