Sanchez-Vicario, 30, confirmed her departure from the WTA Tour at a packed press conference near her native Barcelona, Spain.
"It's not been easy, but I think the time has come for me to abandon tennis," she said at the family-owned Open Sports Club. "My motives are personal. Up to now, all my life has been tennis. It's been a great effort, but in exchange I have got what any professional sports person could want."
After turning professional in June 1985, she won 29 tournaments, including the French Open three times and the U.S. Open once. She appeared in eight other major finals.
Sanchez-Vicario earned the nickname, "The Barcelona Bumblebee" for her buzzing, tenacious style. Her older brothers Emilio and Javier Sanchez competed on the men's tour, with Emilio coaching her after he retired.
In 1988, Sanchez-Vicario won her first title at the Belgian Open at age 16 years, 11 months. A year later, she upset Steffi Graf, 7-6 (10-8), 3-6, 7-5, in the French Open final to become the first Spanish woman to win at Roland Garros. At the time, she was the youngest French Open champion at 17 years, six months.
The Spaniard won the French and U.S. Opens in 1994, and became the No. 1 player in the world on Feb. 6, 1995. She did not win a Grand Slam title that year, but reached the final at the first three majors.
Sanchez-Vicario once held the top ranking in both singles and doubles simultaneously. She captured 67 doubles titles and several mixed doubles crowns.
In her most recent, she was part of the Spanish team that lost to Slovakia in the Federation Cup finals earlier this month. She lost the deciding match to Janette Husarova, 6-0, 6-2.
In that event, she set records for most Fed Cup matches (100), most Fed Cup ties (58), and most Fed Cup finals appearances (10, shared with Conchita Martinez). She helped Spain win the competition five times, and collected four medals at the Olympics.
Sanchez-Vicario did not win a title this year, with her best result a runner-up finish at the French Community Championships in June. She completed the season ranked 54th.