The decision by the quick-witted, 32-year-old center came 14 months after he broke his right leg and tore up his knee in a collision with a teammate.
"Jayson did everything he possibly could in rehabbing and trying to get well so he could play," Nets president Rod Thorn said during a conference call. "It just hasn't worked out. He has done everything he possibly could."
Thorn said Williams was in Arizona for an undisclosed reason and the Nets had his approval to make the announcement.
"We are very saddened by it because not only was Jayson a terrific basketball player but he also brought the intensity and brought a work ethic to the game as well as a rebounding skill that I think every team needs," Thorn said. "Jayson has so many intangibles that you cannot replace."
In a statement released by the club, Williams said:
"This has been a hard choice for me. I loved playing basketball, I loved being a Net and I loved the fans in New Jersey.
"I believe strongly in our ownership's commitment to bringing our team up to championship quality and I wanted very much to be a part of that effort. But I know from the pain in my knee and what my physicians have told me that my injuries won't allow me to return."
Williams has not played since the collision with Stephon Marbury in a game against Atlanta on April 1, 1999.
He attempted a comeback late last season but he broke his left foot while landing on the foot of rookie teammate Evan Eschmeyer during practice.
The retirement, expected for weeks, came hours before the Nets were to take the first pick in the NBA draft. Thorn said the Nets had planned to make the announcement on Tuesday, but they held off because Byron Scott was hired as coach.
Thorn said there was no urgency to announce the decision on Williams on Wednesday, but since the retirement was common knowledge the club chose to make it official.
"There needs to be a closure about it," Thorn said. "He obviously couldn't play. You all know him. You know how much he wants to play and if there were any chance he could play obviously from Jayson's standpoint, he would pursue it. He had pursued it."
New Jersey has petitioned NBA league office for an injury exception, which would give the team about $3.8 million more salary cap room.
The team will have to wait until April 1 to petition the NBA to have Williams declared a permannt medical disability, which would totally remove his salary from the team's cap.
Williams, who always could be counted on for a joke in the locker room, is in the second year of a six-year, $85 million contract.
The team will honor the contract, Thorn said, adding insurance will pick up a huge chunk of that if Williams was declared a permanent medical disability.
Williams played at St. John's and spent his first two NBA seasons in Philadelphia. He was traded to the Nets in 1992 for a couple of second-round draft picks.
After being dogged by injuries in his first three seasons, Williams started to blossom in 1995-96 when he started a run of four straight years in which he averaged more than 10 rebounds a game.
He was named an All-Star in 1997-98 when he averaged 13.4 points and 13.5 rebounds. He was averaging 8.1 points and 12 rebounds when he was injured.
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