diff --git a/CHANGELOG.md b/CHANGELOG.md
index b45e93a..aec915e 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Added
 
+- `SkipRetry` error is added to be used as a return value from `Handler`.
 - `Servers` method is added to `Inspector`
 - `CancelActiveTask` method is added to `Inspector`.
 - `ListSchedulerEnqueueEvents` method is added to `Inspector`.
diff --git a/processor.go b/processor.go
index 477b012..8c57466 100644
--- a/processor.go
+++ b/processor.go
@@ -6,6 +6,7 @@ package asynq
 
 import (
 	"context"
+	"errors"
 	"fmt"
 	"math/rand"
 	"runtime"
@@ -261,11 +262,15 @@ func (p *processor) markAsDone(ctx context.Context, msg *base.TaskMessage) {
 	}
 }
 
+// SkipRetry is used as a return value from Handler.ProcessTask to indicate that
+// the task should not be retried and should be archived instead.
+var SkipRetry = errors.New("skip retry for the task")
+
 func (p *processor) retryOrKill(ctx context.Context, msg *base.TaskMessage, err error) {
 	if p.errHandler != nil {
 		p.errHandler.HandleError(ctx, NewTask(msg.Type, msg.Payload), err)
 	}
-	if msg.Retried >= msg.Retry {
+	if msg.Retried >= msg.Retry || errors.Is(err, SkipRetry) {
 		p.logger.Warnf("Retry exhausted for task id=%s", msg.ID)
 		p.kill(ctx, msg, err)
 	} else {
diff --git a/processor_test.go b/processor_test.go
index 24b403f..f496971 100644
--- a/processor_test.go
+++ b/processor_test.go
@@ -307,9 +307,11 @@ func TestProcessorRetry(t *testing.T) {
 	m4 := h.NewTaskMessage("sync", nil)
 
 	errMsg := "something went wrong"
+	wrappedSkipRetry := fmt.Errorf("%s:%w", errMsg, SkipRetry)
 	now := time.Now()
 
 	tests := []struct {
+		desc         string              // test description
 		pending      []*base.TaskMessage // initial default queue state
 		incoming     []*base.TaskMessage // tasks to be enqueued during run
 		delay        time.Duration       // retry delay duration
@@ -320,6 +322,7 @@ func TestProcessorRetry(t *testing.T) {
 		wantErrCount int                 // number of times error handler should be called
 	}{
 		{
+			desc:     "Should automatically retry errored tasks",
 			pending:  []*base.TaskMessage{m1, m2},
 			incoming: []*base.TaskMessage{m3, m4},
 			delay:    time.Minute,
@@ -335,6 +338,38 @@ func TestProcessorRetry(t *testing.T) {
 			wantDead:     []*base.TaskMessage{h.TaskMessageWithError(*m1, errMsg)},
 			wantErrCount: 4,
 		},
+		{
+			desc:     "Should skip retry errored tasks",
+			pending:  []*base.TaskMessage{m1, m2},
+			incoming: []*base.TaskMessage{},
+			delay:    time.Minute,
+			handler: HandlerFunc(func(ctx context.Context, task *Task) error {
+				return SkipRetry // return SkipRetry without wrapping
+			}),
+			wait:      2 * time.Second,
+			wantRetry: []base.Z{},
+			wantDead: []*base.TaskMessage{
+				h.TaskMessageWithError(*m1, SkipRetry.Error()),
+				h.TaskMessageWithError(*m2, SkipRetry.Error()),
+			},
+			wantErrCount: 2, // ErrorHandler should still be called with SkipRetry error
+		},
+		{
+			desc:     "Should skip retry errored tasks (with error wrapping)",
+			pending:  []*base.TaskMessage{m1, m2},
+			incoming: []*base.TaskMessage{},
+			delay:    time.Minute,
+			handler: HandlerFunc(func(ctx context.Context, task *Task) error {
+				return wrappedSkipRetry
+			}),
+			wait:      2 * time.Second,
+			wantRetry: []base.Z{},
+			wantDead: []*base.TaskMessage{
+				h.TaskMessageWithError(*m1, wrappedSkipRetry.Error()),
+				h.TaskMessageWithError(*m2, wrappedSkipRetry.Error()),
+			},
+			wantErrCount: 2, // ErrorHandler should still be called with SkipRetry error
+		},
 	}
 
 	for _, tc := range tests {
@@ -389,16 +424,16 @@ func TestProcessorRetry(t *testing.T) {
 		cmpOpt := h.EquateInt64Approx(1) // allow up to a second difference in zset score
 		gotRetry := h.GetRetryEntries(t, r, base.DefaultQueueName)
 		if diff := cmp.Diff(tc.wantRetry, gotRetry, h.SortZSetEntryOpt, cmpOpt); diff != "" {
-			t.Errorf("mismatch found in %q after running processor; (-want, +got)\n%s", base.RetryKey(base.DefaultQueueName), diff)
+			t.Errorf("%s: mismatch found in %q after running processor; (-want, +got)\n%s", tc.desc, base.RetryKey(base.DefaultQueueName), diff)
 		}
 
 		gotDead := h.GetDeadMessages(t, r, base.DefaultQueueName)
 		if diff := cmp.Diff(tc.wantDead, gotDead, h.SortMsgOpt); diff != "" {
-			t.Errorf("mismatch found in %q after running processor; (-want, +got)\n%s", base.DeadKey(base.DefaultQueueName), diff)
+			t.Errorf("%s: mismatch found in %q after running processor; (-want, +got)\n%s", tc.desc, base.DeadKey(base.DefaultQueueName), diff)
 		}
 
 		if l := r.LLen(base.ActiveKey(base.DefaultQueueName)).Val(); l != 0 {
-			t.Errorf("%q has %d tasks, want 0", base.ActiveKey(base.DefaultQueueName), l)
+			t.Errorf("%s: %q has %d tasks, want 0", base.ActiveKey(base.DefaultQueueName), tc.desc, l)
 		}
 
 		if n != tc.wantErrCount {
diff --git a/server.go b/server.go
index 418c54a..261031b 100644
--- a/server.go
+++ b/server.go
@@ -392,6 +392,9 @@ func NewServer(r RedisConnOpt, cfg Config) *Server {
 //
 // If ProcessTask return a non-nil error or panics, the task
 // will be retried after delay.
+// One exception to this rule is when ProcessTask returns SkipRetry error.
+// If the returned error is SkipRetry or the error wraps SkipRetry, retry is
+// skipped and task will be archived instead.
 type Handler interface {
 	ProcessTask(context.Context, *Task) error
 }