James Toseland will retire from racing with immediate effect because of a wrist injury he sustained during a crash at Aragon, Spain in March.
The double World Superbike champion was told he could not continue after a visit to surgeon Mike Hayton.
The 31-year-old, said: "I've tried everything possible but the sad truth is that none of it has worked.
"My wrist will never fully heal enough for me to operate the throttle properly and navigate right hand turns."
Toseland's injury to his right wrist happened during testing. He has been racing in World Superbikes since ending his two-year spell in MotoGP and has been part of the BMW Motorrad Italia team this year. His title triumphs came in 2004 with Ducati and in 2007 on a Ten Kate Honda.
In a statement, he added: "I've had a tough time since injuring my right wrist during a testing crash at Aragon in Spain earlier this year.
"At the time of first seeing my consultant, he warned that the damage to my wrist could be career-threatening, but we both committed to doing everything we could to ensure that I could continue racing.
"Having struggled through a couple of races and then crashing out in the terrible conditions at Nurburgring in Germany, I went back to see the consultant, Mike Hayton, this week and the diagnosis was the worst I could have prepared myself for.
"I have to put the safety of the other riders on track first, as well as thinking about my own safety. Knowing that I will never again be fully fit to race at the highest level, it's also unfair for me to occupy a great seat in WSBK that a young, talented rider who is fully fit could take better advantage of."
Toseland emerged as a talent a decade ago. In only his second year in the World Superbike series in 2002, he was a regular top-six finisher and secured his first-ever podium finish at Assen.
He followed that up with a momentous 2004 season with Ducati as he became the youngest-ever World Superbike champion, aged 23. It was a feat he repeated again three years later when, after a thrilling season of racing, he sealed the title again.
In 2008, he switched to MotoGP but, after an injury-hit two years, he was back in World Superbikes before the injury news ended his career.