The 51-year-old father of three, dubbed the "Super Sherpa" for the apparent ease with which he climbs, said he wanted to give younger mountaineers a chance, but that he would not be abandoning the sport altogether.
"I have decided to call it quits. Every time I go up Everest, my family worries about me," Sherpa told AFP in the Nepalese capital Kathmandu, after extending his own record with a 21st ascent of Everest.
"I would like to give young climbers a chance, but I will not abandon the mountains I have invested my life in. I will train new climbers."
Sherpa, who was born in Nepal but now lives in the United States, first scaled the 8,848-metre (29,028-foot) peak in 1990.
He has spoken of the dramatic changes to Everest in the past two decades, and after an expedition last year said rising temperatures were making the mountain increasingly dangerous for climbers.
"The snow along the slopes had melted, exposing the bare rocks underneath, which made it very difficult for us to walk up the slope as there was no snow to dig our crampons into," he told AFP in an interview.
The climber has dedicated his last four ascents to efforts to preserve Everest, which the Sherpa people consider sacred, and this year climbed with a team removing tonnes of rubbish left behind by earlier climbers.
Last year, Sherpa set up a foundation dedicated to improving education in the remote Himalayan region where he grew up, and on Saturday he said he would now focus on raising funds for the charity.
Around 3,000 people have made it to the top of Everest since Edmund Hillary and Tenzing Norgay became the first to conquer the mountain in 1953.
The summit season on Everest begins in late April and May when a small window between spring and the summer monsoon offers the best conditions for making the ascent.