Allardyce said: "We will say farewell at the end of the season and thank you very much for what you have done for Blackburn."
He added: "Certainly if we remain in the Premier League, Tugay can bow out gracefully after playing at the top level most of the time.
"He has had a fantastic career. But at 38 and the ever-increasing demands of the Premier League, certainly in a physical sense, it means you cannot go on forever."