Frankel, trained in England by Henry Cecil, was retired last month after accumulating almost £3 million in earnings from 14 victories.
The four-year-old, named Cartier Racehorse of the Year for the second successive year on Tuesday, will stand at owner Khalid Abdulla's Banstead Manor stud, part of his Juddmonte Farms operation.
"The fee for Frankel reflects his merits as being perhaps the greatest racehorse we have ever witnessed," said Juddmonte Farms's general manager Philip Mitchell in announcing Frankel's stud fee.
"He is by Galileo, who is now recognised as the best sire in the world, and out of Kind, a winner of six races (from five to seven furlongs) and herself a daughter of one of the most influential stallions in the history of thoroughbred breeding, Danehill."
Frankel, named after American trainer Bobby Frankel who died three years ago, ended his career in perfect style at Ascot last month by winning the Champion Stakes.
The stud fee for Frankel is by no means the highest for a thoroughbred, American stallion Storm Cat commanding a £350,000 fee at the peak of his stud career a decade ago.