Lipnitskaya became the face of the 2014 Sochi Olympics as a 15-year-old after helping Russia win gold in the team event.
She became Russia's youngest Winter Olympic gold medallist, and the youngest gold medallist in figure skating for 78 years.
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Lipnitskaya informed the Russian Figure Skating Federation of her decision to retire in April after undergoing treatment for anorexia, her mother told TASS news agency.
The news about Lipnitskaya came a day after the coach of reigning Olympic champion Adelina Sotnikova said she would miss the rest of the season and not defend her title at the Pyeongchang Games in South Korea due to injury.
Sotnikova's coach, twice Olympic gold medallist Yevgeny Plushenko, told R-Sport news agency that her absence from next year's Games should not be viewed as her retirement.
Vladimir Putin and Julia Lipnitskaya (Reuters)
Image credit: Eurosport