The Bolton Wanderers star, who suffered a cardiac arrest during an FA Cup tie in March, said he was devastated his footy career was over but had to put his health first.
He thanked the medical team who saved him and said he was grateful for all the support he has received.
Muamba’s heart stopped for 78 minutes after he collapsed on the pitch at White Hart Lane on March 17.
Millions on TV watched as medics from both teams and a heart specialist who rushed from the stands desperately battled to keep him alive.
He spent a month in hospital but stunned doctors with his amazing recovery and never gave up hope of a return to the pitch.
The midfielder even underwent a heart operation in Belgium last week as he set his sights on a comeback.
His fiancee Shauna tweeted a hopeful update to friends and family following the surgery.
She said: “Thank you guys for the support if it is Gods will @fmuamba will play again even better and stronger than before. Faith can move mountains.”
But docs told him playing in the top flight could put too much strain on his heart and was not worth the risk.
A source said: “Fabrice is devastated as you can imagine.”
Despite the disappointment, the soccer ace is determined to stay positive.
Before the announcement, he cryptically tweeted: “KEEP SMILING PEOPLE.”
The star is now in line for a multi-million pound insurance payout.
Muamba’s cardiac arrest was not the first time he has battled against the odds.
His family fled war in the Democratic Republic of Congo before seeking asylum in the UK.
Despite arriving in London aged 11 unable to speak English, he managed to get 10 GCSEs and three A-levels at school.
He then joined Arsenal FC’s youth academy in 2002 before moving to Birmingham and then Bolton in 2008.