Baillie and best friend Etienne Stott combined to win C2 canoe slalom gold at London 2012, the culmination of a partnership spanning nine years.
Last year they returned to the World Cup podium but when Stott dislocated his shoulder to prematurely end their season, 34-year old Baillie evaluated his future.
“Retiring from international canoe slalom racing has been a difficult decision which I've agonised over for a long time,” he said.
“I still love canoeing but I've realised that I no longer have the underlying desire required to commit all of my time to the singular pursuit of canoe slalom excellence.
“Looking back, the London Olympic cycle took a lot of energy, particularly fighting back from so many setbacks and I think that burned through my passion for the sport.
“Whilst my decision to retire is tinged with sadness I feel that Etienne and I have both had an incredible journey to look back on and a lot of exciting things to look forward to, so overall I'm feeling positive.
“I’d like to thank Etienne for all the adventures; it's truly a testament to our friendship that it's survived nine years of being strapped into the same canoe."
Stott returned to paddling this month and insists he remains dedicated to retaining his title in Rio - with a new partner.
“It's sad because it's the end of a chapter but I respect Tim's decision and it is the right thing for Tim,” he said.
“I'm so proud and happy with the career that Tim and I had together, and very thankful for the good times, the hard times and the challenges that we've been through as a crew.
“It’s taught me so much and developed me so far as an athlete, far beyond anything I would have dreamed of. I don't think that would have happened with another person and Tim has helped me so much. He has made a huge contribution to the sport and to me as an athlete.”