Forward Marshall has retired aged only 26 after being out of action all this season and playing just five games for the club in 2015-16.
Last September, Connacht's Ireland prop Nathan White was forced to halt his career for similar reasons.
"Unfortunately, my time as a player has come to an end earlier than I would have wished," said Marshall on Tuesday.
"It has been a difficult time not being able to play since the injury but having had some time away from the game, I can appreciate how fortunate I've also been in my career."
Two arm injuries restricted Marshall to only a couple of appearances in the early part of 2015-16 and he then suffered a head injury late in Connacht's Pro12-winning campaign after signing a contract extension last March.
Dublin-born Marshall has not played this season and after taking medical advice, has now decided to end his career.
"I would also like to take this opportunity to thank the Connacht head physio Garrett Coughlan and the medical team who have given me wonderful care and support over the past eleven months," added Marshall.
"I am looking forward to continuing in my financial studies and the new career path that is ahead of me, but I will always be appreciative of the lessons that Willie [Ruane] and Pat [Lam] taught me during my time at Connacht Rugby."
Marshall won 10 Ireland Under-20 caps and made 20 appearances for Leinster before moving to Connacht prior to the 2015-16 season.
The back row forward played for an Ireland XV in a non-cap game against the Barbarians in May 2015 before representing an Emerging Ireland team in the Tbilisi Cup in Georgia later that summer.
Connacht coach Pat Lam described the former Leinster player as "an excellent team man".
"I have no doubt that he will go on to achieve great things in his business and life pursuits going forward," added Lam.
Ben Marshall has become the second Connacht player this season to have his career ended by a concussion injury.