The 32-year-old Li posted a statement on social media sites Friday, ending a week of intensifying speculation that she would announce her retirement ahead of the new WTA tournament at Wuhan, her home town.
The WTA, which runs women's tennis, has described Li as a trailblazer and credits her with being the first player from Asia to win a major title — she won the 2011 French Open, beating four Top 10 players in succession to wrap up the title — a few months after becoming the first from the region to reach a Grand Slam final, which she did at the 2011 Australian Open.
She clinched the Australian Open title in January, in her third trip to the final at Melbourne Park, to reach a career-high No. 2 ranking, another continental milestone.
Li hasn't played since a third-round defeat at Wimbledon, withdrawing from the U.S. Open citing a knee injury.
"Most people in the tennis world know that my career has been marked by my troubled right knee," Li said in the open letter she posted online. "After four knee surgeries and hundreds of shots injected into my knee weekly to alleviate swelling and pain, my body is begging me to stop the pounding."
After three operations on her right knee, dating back to March 2008, Li said her most recent surgery in July was on her left knee.
"After a few weeks of post-surgery recovery, I tried to go through all the necessary steps to get back on the court," she said. "While I've come back from surgery in the past, this time it felt different.
"One of my goals was to recover as fast as I could in order to be ready for the first WTA tournament in my hometown. As hard as I tried to get back to being 100 per cent, my body kept telling me that, at 32, I will not be able to compete at the top level ever again. The sport is just too competitive, too good, to not be 100 per cent."
Li started her career in the national system system, but had a keen sense of individuality. She bucked the system at times during her career — giving up tennis for two years to do media studies at a university earlier in her career — and later insisting on selecting her own coach. She also has won support from the public for her courage to defy China's rigid state-run sports system aimed at training world-class athletes.
The announcement that she had parted ways with coach Carlos Rodriguez, ending an almost two-year working relationship with the former long-time mentor for Justin Henin, followed her Wimbledon defeat in July.
Li won millions of admirers with her tough-as-nails approach on court, and her warmth and charm outside the arena. Her frequent jokes about life with Jiang Shan, her former coach and husband since 2006, in courtside interviews helped Li become an instant hit at the Australian Open.
Among her other milestones, Li was the first Chinese player to win a WTA tour title (Guangzhou in 2004), the first to reach a Grand Slam singles quarterfinal (Wimbledon in 2006), first to break into the Top 20.
"I've succeeded on the global stage in a sport that a few years ago was in its infancy in China," Li said. "What I've accomplished for myself is beyond my wildest dreams. What I accomplished for my country is one of my most proud achievements."
Li rose to No. 2 in the rankings after her win in Australia in January, but dropped to No. 6 this month due to her injury-enforced inactivity.
In the immediate future is the establishment of a Li Na Tennis Academy, providing scholarships for future Chinese players. In the not-too-distant future, she's hoping to start a family.
"My philanthropic work will expand in scope as I continue to dedicate myself to helping those in need. What was once just a dream in China today is a reality," she said. "On a personal side, I look forward to starting a new chapter of my life, hopefully having a family and reconnecting with those I did not have the luxury of spending a lot of time with while playing."
In a statement celebrating her 15-year professional career, WTA chief executive Stacey Allaster said Li "has been a fun, powerful, and wonderful player on the WTA tour and, along with her fans, I am sad to hear that she has retired."
"In addition to her amazing tennis abilities and her warm and humorous personality, she is a pioneer who opened doors to tennis for hundreds of millions of people throughout China and Asia. Her legacy is immense and I have no doubt that her contributions to the WTA will be seen for decades to come," Allaster said. "It's hard to be a household name in a nation with 1.4 billion people, but that's what Li Na is."
AP Sports Writer John Pye in Brisbane, Australia contributed to this report.