Shamardal has been retired to stud following a training injury. He has been diagnosed with an osteochondral fracture fragment of his right fore fetlock. Stud details will be announced as soon as possible.
This sudden end to Shamardal's illustrious racing career came just before he was to take on Derby winner Motivator and older horses for the first time in the Group One Coral Eclipse Stakes over 10 furlongs at Sandown Park on Saturday, July 2.
His trainer Saeed bin Suroor reacted: "It is very disappointing that this injury has occurred. We were looking forward so much to running him against Motivator and the others in the Eclipse. He would have had a great chance in the race as he was in tremendous form.
"With this problem, he is not going to run again which makes me unhappy. We found the horse unsound but these things happen in racing.
"Shamardal was a great racehorse - he won three Group One races this year. The first two were Classics and then he won very easily at York in the St James's Palace Stakes. He is one of the best horses Godolphin has had."
Simon Crisford, Godolphin's Racing Manager, said: "Shamardal was champion two-year-old of Europe last year. He looked sensational then and had gone from strength to strength this year.
"Any horse who captures four Group Ones, including two Classics, has to be very special and he always showed tremendous speed and courage in his races. He could not have been more impressive in the St James's Palace Stakes at Royal Ascot."
Frankie Dettori, Godolphin's retained rider who triumphed in the French 2,000 Guineas and French Derby on Shamardal, declared: "He was a great horse to be around - very uncomplicated - and a real champion.
"He had real gears and I was particularly looking forward to the Eclipse.
"He was the champion two-year-old and a dual classic winner this year and the St James's Palace victor. We have already seen how good he was but it is a shame that he could not fulfill his full potential in the great career he was going to have."
Kerrin McEvoy, Godolphin's second jockey, partnered Shamardal to victory last time out in the St James's Palace Stakes at Royal Ascot at York.
"It is terrible news - when I got off at York I said I had never ridden an easier Group One winner.
"He gave me a real thrill at Royal Ascot at York - it is very disappointing that he cannot take his spot in the Eclipse and race in the future. He was such a lovely horse - a true racehorse."
The three-year-old colt by Giant's Causeway out of Helsinki, was unbeaten in all his six starts on turf.
His first victory of 2005 came in the Group One Gainsborough Poule d'Essai des Poulains (French 2,000 Guineas) over a mile at Longchamp on May 15, when he defeated Indesatchel by a head under Frankie Dettori, making all.
He returned to France on June 5 to contest another Classic, the Group One Prix du Jockey Club (French Derby) at Chantilly over 10 furlongs and 110 yards.
The increased distance did not prove a problem for Shamardal as he again made all the running with Frankie Dettori up to defeat Hurricane Run, subsequently successful in the Irish Derby, by a neck.
Shamardal reverted to a mile for his final outing on June 14 and put up a superb display to take the Group One St James's Palace Stakes at Royal Ascot at York by a very comfortable three lengths from Ad Valorem.
His only reversal came when he was unsuited by dirt on his seasonal debut in the Group Two UAE Derby at Nad Al Sheba on March 26.
As a two-year-old, Shamardal started by winning a six-furlong maiden impressively at Ayr in Scotland in July of last year when trained by Mark Johnston and then travelled south for the Group Two Veuve Clicquot Vintage Stakes at Goodwood 16 days later.
He made all again, this time over seven furlongs, and won in great style by two and a half lengths from Wilko, the subsequent Breeders' Cup Juvenile scorer.
Shamardal returned to the racetrack in October for the Group One Darley Dewhurst Stakes at Newmarket and had a convincing all-the-way success, beating Oratorio by two and a half lengths.