The former Leicester City and Manchester City winger helped Al Ahli win the AFC Champions League last season before his departure was confirmed on Saturday.
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The 34-year-old had earlier announced his retirement from international football after earning 119 caps for Algeria.
Mahrez captained the Desert Foxes to the 2019 Africa Cup of Nations title and established himself as one of the country's greatest-ever players.
His final appearance for Algeria came in the 2026 FIFA World Cup, where they were eliminated by Switzerland in the last 32.
Mahrez now leaves both club and international football at a significant turning point in his illustrious career.