The five-year-old filly, owned by composer Andrew Lloyd Webber and his wife, picked up a knock when finishing sixth at Sandown and has been sent to stud.
The Fugue's career comes to an end just a month after she won the Prince of Wales's Stakes at Royal Ascot in record time under William Buick.
Trainer John Gosden said: "Unfortunately The Fugue sustained an injury to her near-fore in the Eclipse Stakes.
"Having discussed the matter with Andrew and Madeleine Lloyd-Webber, we have taken the decision, in the best interests of the filly, to retire her from racing.
"The Fugue has been a pleasure to train and to be around for all of us here and she never ceased to amaze us with her courage and athletic ability."
The Fugue also won the 2012 Nassau Stakes at Goodwood, then the Yorkshire Oaks and Irish Champion Stakes last year.