Quinceanera set a new global mark for a thoroughbred yearling when Australian Debbie Kepitis's Woppitt Bloodstock fended off interest from America, Japan and Europe to buy her in 2024.
Sired by leading stallion Pierro, there were high hopes for the filly.
But the three-year-old will now become a broodmare -- one kept specifically for breeding purposes.
Woppitt Bloodstock said on social media the "tough decision" to retire her was made "following veterinary advice and in consultation with (trainer) Chris Waller".
"Although disappointing, it's in her best interest to now begin her career as a broodmare," it added.
Winx was the world's top-rated turf horse ahead of her retirement in 2019 with an amazing four-year unbeaten streak, winning 33 races in a row including 25 Group 1 victories.
She banked more than $26 million in prize money.
Winx lost her first foal, from I Am Invincible, during birth.
She has a third, a colt by leading sire Snitzel, which was due to be sold at a highly-anticipated Easter auction with another record price tipped.
But the two-year-old was withdrawn after a paddock accident.