Corale-Eclipse Stakes hopeful Shamardal has been retired after chipping a bone in a joint.
The French Derby and French 2,000 Guineas winner was seen as the big danger to Eclipse favourite Motivator at Sandown on Saturday.
But the Godolphin colt has been forced out of the race by an injury which has proved to be career ending.
Motivator's odds for the contest have shortened further, with the Epsom Derby winner now as low as 4-9.
Shamardal was aimed at the Eclipse after following up his French wins with an emphatic victory in the St James's Palace Stakes at Royal Ascot at York.
The showdown with Motivator had captured the racing public's imagination, with Sandown expecting a sell-out crowd.
Shamardal's trainer Saeed bin Suroor said: "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."
Regular jockey Frankie Dettori, who ride Shamardal in the French Guineas and Derby, said the horse was "a real champion."
Dettori added: "We have already seen how good he was but it is a shame that he could not fulfill his full potential."
Shamardal's record
Races 7 Wins 6 Unplaced 1
14/06/05 (Yor) 1ST St James's Palace Stakes
05/06/05 (Cha) 1ST French Derby
15/05/05 (Lon) 1ST French 2,000 Guineas
26/03/05 (Nad) 9TH UAE Derby
16/10/04 (New) 1ST Dewhurst Stakes
28/07/04 (Goo) 1ST Vintage Stakes
12/07/04 (Ayr) 1ST European Breeders' Fund Maiden Stakes
Cha - Chantilly; Lon - Longchamp; Nad - Nad Al Sheba;
Goo - Goodwood; Yor - York; New - Newmarket