Steven Gerrard admitted it was the toughest decision of his life as he confirmed his departure from Liverpool at the end of the season but vowed to return after retiring, with the ambition of managing the club.

Gerrard will be 35 in May and has decided to reject Liverpool’s offer of new terms. As a free agent he can talk to suitors – although the captain said he will not sign for another Premier League club.

“This has been the toughest decision of my life and one which both me and my family have agonised over for a good deal of time,” Gerrard said. “I am making the announcement now so the manager and the team are not distracted by stories or speculation about my future. Liverpool Football Club has been such a huge part of all our lives for so long and saying goodbye is going to be difficult but I feel it’s something that’s in the best interests of all involved, including my family and the club itself.

“I’m going to carry on playing and although I can’t confirm at this stage where that will be, I can say it will be somewhere that means I won’t be playing for a competing club, and will not therefore be lining up against Liverpool – that is something I could never contemplate.”

Gerrard will have no shortage of offers from around the world but wants to one day come back to the club where he has won nine major trophies, including the Champions League in 2005. “It is a very special place to be part of. It is my sincere hope and wish that one day I can return to serve Liverpool again, in whatever capacity best helps the club,” he said.

While Liverpool’s principal owner, John W Henry, and the chairman, Tom Werner, said in a joint statement Gerrard would be welcomed back whenever he wished, the midfielder has spoken of his ambition to become the manager at Anfield. “I want to stay in the game. If I’m good enough, if Liverpool came, I’d love to do that. It would be a dream to get that opportunity. The dream come true would be to manage Liverpool, when the Liverpool job becomes available,” he said last year.

Gerrard seems to favour a move to Major League Soccer, where Los Angeles Galaxy head the American clubs who will be interested in signing him, although Liverpool’s statement hinted the midfielder may listen to offers from any team – as long as they do not play in the UK.

It read: “Gerrard will not retire from professional football at the conclusion of the 2014-15 season. No decision on his new club has been made yet but he will continue his career outside the United Kingdom and at a side that will not bring him into direct competition with Liverpool.”

Gerrard said: “My decision is completely based on my wish to experience something different in my career and life, and I also want to make sure I have no regrets when my playing career is eventually over.”