The former Holland international is 40 later this month and Steele said he had intimated he was ready to bow out, although he is keen to pick up the only domestic medal missing from his collection - the FA Cup - before he does.
'I think Ed has made his mind up and said this is his last year,' Steele told the Manchester Evening News.
End of the road: United goalkeeper coach Eric Steele believes Dutch great Van der Sar will bow out of football at the end of the seaosn
'He is a good pro and a sensible and highly intelligent guy who will know when the time is right. I don't think he will need myself or the manager to tell him that time has come. He will know.
'But if he gets to Christmas and he thinks it is right to go on and the manager (Sir Alex Ferguson) thinks it is right we will make a decision.
'It is down to how he feels and performs. If he doesn't perform the manager will make the decision. Edwin will as well.'
Hand it to him: Van der Sar is desperate to win the FA Cup before he retires
Steele said Van der Sar, who is a Champions League, Barclays Premier League and Carling Cup winner with United, was keen to get his hands on the oldest knockout trophy in club football.
'He hasn't won it and that is a big target for him,' added Steele.
'When we rotate our goalkeepers I think you will see Mr Van der Sar knocking on the door and asking the boss to play in the FA Cup.'
Sir Alex Ferguson will now make signing a replacement his priority, but budget limitations at Old Trafford means he will be looking to spend between £5m-10m.
The United boss sent Steele to watch Anders Lindegaard of Aalesunds again at the weekend, while Van der Sar's successor in the Holland team, £9m-rated Ajax keeper Maarten Stekelenburg, is also a possible transfer target.
Another option, Schalke's Germany international Manuel Neuer, left the door open for a move to Old Trafford yesterday by insisting he has not agreed to join Bayern Munich at the end of the season.
Neuer's future at Schalke has been under scrutiny since he admitted his unhappiness following Saturday's defeat to Nuremberg, and he said: 'My future is open. I've always said that in any case I will play at Schalke until the end of the season.'
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