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The Frenchman, 35, opted to extend his contract with the Royals in February until June 2018, having joined from Bournemouth in January 2016.
"It's a decision I took with my family, who I've been away from now for 13 years," he told BBC Radio Berkshire.
"We just think it's a good time for me to get back home and start a new life. I'm building a house in France."
Kermorgant, who also played for Leicester and Charlton, has scored 10 goals for Reading so far this season as they bid to secure a Championship play-off place.
He will hope to play a key role when Jaap Stam's side face fellow promotion contenders Leeds at home on Saturday.
"I think it will be a big game," Kermorgant said. "There's every chance we could meet again in May if we both stay in our current positions.
"It will be a good test for us to see where we can be. We want to finish as high as we can and we've been third in the league for a long time.
"If we can beat Leeds, that will take us to fourth and maybe we can push for more."

The move was part of a plan to clear a 100m (328ft) security zone around the camp's perimeter, an official told AP.
But some migrants and activists said the places of worship had not been included in the demolition plans, local media reported.
The Jungle is used by about 5,000 migrants who say they want to reach the UK.
The church's pastor clashed with police during the demolition but the mosque had already been abandoned and there were no protests, the unnamed official said.
No-one was hurt and the migrants were free to build new churches and mosques, the official added.
However, civil society groups working in the camp claimed the authorities had promised not to demolish them in the first place.
"It was agreed that the church and the mosque would stay. By demolishing them, the authorities are showing contempt for NGOs (non-governmental organisations) and are seeking conflict with the migrants who used these places," said Christian Salome of the NGO Auberge des Migrants, the Voix du Nord newspaper reported.
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There is still a church and about six mosques in the Jungle, Mr Salome added.
The French authorities have been clearing a 100m zone between the Jungle and a nearby motorway.
They have also encouraged the migrants inside the camp to move into new accommodation made from shipping containers.
The 125 converted containers are equipped with electricity, heating and bunk beds, and each one can accommodate 12 people.
About 1,000 migrants have taken up the offer, but others refused and moved their tents further inside the Jungle, despite the poor living conditions.
Reading striker Yann Kermorgant has confirmed he will retire at the end of the 2017-18 season.
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French authorities have demolished a makeshift church and mosque at the Calais camp known as the Jungle.