Lorenzo had a contract with Repsol Honda for the 2020 campaign, but he had a disappointing debut season aboard the RC213V and was forced to miss four races in the middle part of this year following a crash in practice at Assen in June.
The 32-year-old Spaniard has now confirmed in an ‘exceptional’ press conference held in Valencia on Thursday that he is leaving his MotoGP career which began in 2008.
Lorenzo has won five titles and achieved 68 victories across all classes.
The Mallorcan's departure after an injury-blighted season leaves a coveted vacancy alongside compatriot Marc Marquez, the six times MotoGP world champion, at the Repsol Honda team.
He said his difficulties this season led to his decision to retire.
"I love this sport but above all I love winning," he said at a special news conference also attended by series CEO Carmelo Ezpeleta.
I have let myself down and I have let down Honda but I think this is the best decision for me and the team. We are both winners and we always have to fight to win.
Lorenzo said earlier this month that he needed a month or a month-and-a-half without racing in order to recover fully for next season but has now decided to call it a day.
"In this stage in my career it has been impossible to stay concentrated, I feel very bad for Honda," he added.
"I'm fortune to have the career I've had. I've battled with a lot of riders who have not been able to fight to win a world championship like I have. I will always feel very fortunate for having that opportunity."
One of the greats but a legacy left wanting
Lorenzo’s career can be considered one of the greatest of a Spanish rider. He had a great rivalry with Valentino Rossi and Marc Márquez on Moto GP and he won two world titles in the 250cc category (now Moto2) in 2006 and 2007, was MotoGP champion in 2010, 2012 and 2015 with Yamaha.
Yes, this season has impacted his legacy, because this year Lorenzo had a great moto with which he could have won the championship. He won’t leave the motorbikes as the best driver of all time, because he hasn’t won fourteen titles like Angel Nieto.
His rivalry with Rossi isn’t the best in the sport. Márquez and Rossi is still the greatest rivalry in the history of Moto GP.