Hughes, 39, already has a new job lined up, as he becomes the UFC's vice-president of athlete development and government relations.
"Matt is one of those guys that was there from the early days and helped grow MMA to the modern, professional sport it is today," UFC president Dana White said in a statement. "He has been in the sport since the late 1990s and really seen it all."
To coincide with Hughes' new job, the UFC introduced a clear set of athlete guidelines, or conduct policy, memorializing the values long held by the organization.
"Hughes will be an invaluable resource for UFC athletes," UFC COO Lawrence Epstein said in a release. "Leveraging the background and expertise he gained over a Hall of Fame career, Hughes will be dedicated to providing guidance on a wide range of issues athletes face inside and outside of the Octagon."
Hughes leaves the sport with a 46-9 record, including more than a handful of championship fights.
"This includes understanding the heightened social responsibility that comes with being in the public eye, to best practices when dealing with endorsements or managing finances, to the basic daily challenges of staying healthy during training, as well as the need to steer clear of illegal and/or performance-enhancing drugs," Epstein added of the UFC's new guidelines that Hughes will be in charge of.