Winner of two Cheltenham Gold Cups and five King George VI Chases, Kauto Star was pulled up on his final start in last season's Gold Cup. His people took time to make a final decision over whether the 12-year-old should race on, but Nicholls and owner Clive Smith have decided enough is enough.
Nicholls said: "The end of an era has arrived. Clive was here this morning and we have taken the decision to retire Kauto Star."
The trainer said in September connections would consider giving the old chap one last run in the King George at Kempton on Boxing Day. However, having seen him on the gallops in recent weeks, it was felt now is the right time to call a halt.
"We have had nine superb years with the horse but, after seeing him in his work these past few weeks, myself, Clifford [Baker, head lad] and Dan [Skelton, assistant trainer] were of the opinion that the time had arrived to retire him," Nicholls said.
"Of course, the final decision rested with Clive, but he agreed. Kauto looks and feels as vibrant as ever, as those who saw him at our owners' Open Day last month would testify to.
"However, I suspect Kauto will be like that when he is 20. Deep down, we know he has done enough – and in some ways I think we have to protect him from himself, maybe ourselves, too. If he did go to Kempton and win or run well, would you want to run him – or be able to resist the temptation – in the Gold Cup? I am not sure."
"He is signing off in full health and after a season in which he proved so many people wrong by winning a fifth King George and a fourth Betfair Chase, to add to his two Cheltenham Gold Cups and Tingle Creeks.
"Kauto is Clive's horse, not mine. He has now made the call – and a brave and difficult one it would have been, too, so credit to him."