The 2010 Winter Olympics champion has suffered a horrific run of injuries since her triumph in Vancouver, and has decided not to defend her title at Sochi in 2014.
"My injuries have been causing me a lot of pain and I ruptured my knee a week ago," Williams told the Press Association. "It has got to the point where it is not really much fun any more.
"I told myself after Vancouver that I would have a little break then get back on the ice and compete again, because there is still nothing I love more than getting on my sled and going down the track.
"I'm still convinced I could have gone to Sochi and won another medal, but it would take an awful lot of sacrifices and it has just come to the point where my body is screaming at me to stop.
"It is easy for an athlete to stay in their comfort zone, but it takes a bit of guts and bravery to step outside it and find another challenge in life. I am happy and content with what I have achieved in my sport."
Williams became the first British female to win an individual gold medal at a Winter Olympics in 58 years with her comprehensive victory at the Whistler track.
She was later awarded an MBE and has been working as an ambassador for the summer Games in London this year.