Retre, 31, has played 181 games for Melbourne City and Sydney FC in the competition and most recently has been playing in the Indian Super League in Goa.
His time with Sydney spanned six seasons, and saw him lift two championships and two premierships.
"I've been in the A-League for a long time, and was looking for a new challenge. I've had some interest in the past from Wellington."
Retre aims to translate his championship pedigree to Wellington.
"I still have that hunger to succeed. I could have stayed at my old club, had another season there, but I chose to try a new adventure.
"Last year was such a great year. Obviously some players have gone, but that happens when you're successful. Now it's about trying to build on that and do something better."
The Phoenix have lost several key players from last season.
Goalkeeper Alex Paulsen has signed with English premier league side Alex Paulsen, Ben Old has moved to French club Saint-Etienne, strikers Bozhidar Kraev and Oskar Zawada have also departed while defender Finn Surman has signed with MLS club Portland Timbers.
Giancarlo Italiano is pleased to be reuniting with a player he knows from his time working at Sydney FC.
"In terms of the midfield role, he's going to give us an extra layer, not only with the ball, but defensively he's very good," said Italiano.
"I had a lot of time with Paolo when he was at Sydney. He's been abroad, he's had some good experience in India. He won the league a couple of times with Sydney as well, he's been part of that winning group."
"A lot of last year's success was about the young boys, but it was also contingent on the fact that all of the older boys stepped up. Kosta Barbarouses, Alex Rufer, all of them really made it easier for those young boys to shine.
"The priority for me is making sure we have a balanced squad."