Radar quoting a source as stating, "Jack has - without fanfare - retired. There is a simple reason behind his decision - it’s memory loss. Quite frankly, at 76, Jack has memory issues and can no longer remember the lines being asked of him. His memory isn’t what it used to be."
Beginning debut in the 1950s, Nicholson spent much of the following decade appearing in low-budget affair, including several films with both Roger Corman and Monte Hellman, but his big breakthrough came in 1969 when he starred alongside Peter Fonda and Dennis Hopper in the cult classic Easy Rider. The following year he earned the first of a record twelve Oscar nominations for 1970's Five Easy Pieces before going on enjoy a host of significant roles in the likes of Chinatown, One Flew Over the Cuckoo's Nest, The Shining, Reds, Terms of Endearment, Prizzi's Honor, The Witches of Eastwick, Batman, A Few Good Men, As Good As It Gets, About Schmidt, The Departed and The Bucket List.
In all Nicholson collected three Oscars, with Best Actor wins for One Flew Over the Cuckoo's Nest and As Good as It Gets and a Best Supporting Actor gong for Terms of Endearment. His last appearance came in 2010 alongside Reese Witherspoon, Paul Rudd and Owen Wilson in James L. Brooks' 2010 comedy How Do You Know, bringing down the curtain on the career of one of the all time Hollywood greats.
Update - E!Online are quoting their own "source close to the movie icon" as stating that Nicholson has no plans to retire, nor is he suffering from any kind of memory loss. Still it's been a while since his last movie, so I guess we won't know for sure until we hear it from the man himself.