Second in last year's Giro d'Italia, Hindley sat 25th overall after 13 days of racing, 17:42 behind race leader Egan Bernal (Ineos Grenadiers).
"This is obviously not how I wanted my Giro to end," Hindley said in a statement issued by his team.
"The team have really put in a lot to try and help, but the situation isn't improving and I really can't continue anymore. I am really disappointed – I have worked really hard to be here and fight for the team's spot on the podium, but there isn't another option. I'll keep rooting for the team from home and hope to be back in action soon."
Team director Matt Winton paid tribute to Hindley's determination to battle on, but the Australian rider has suffered throughout the first two weeks of racing and lost time on several key mountain stages. Romain Bardet remains the team's best GC option – 11th at 3:29.
"We are really disappointed to not have Jai with us at the race today. He has put in so much hard work over the last few months to be in the best possible shape for the team's goal here at the Giro, and it's a real shame to see his race end like this," Winston said. "The grit and determination that he has shown to try and get through the last few days is a real testament and credit to who he is as a bike rider. He has battled against an unbelievable amount of pain to try and bring value to the team in the way that he had hoped.
"It has been a really difficult decision for both the team and Jai to make and we will miss him amongst the great group of riders and staff we have here, but it is absolutely the right one. Focus now shifts to Jai recovering back at home and we will continue working towards our goals here at the Giro."
Team doctor Anko Boelens gave his evaluation, saying that it wasn't possible for Hindley to race through the mountains while suffering the pain he was in. Team DSM physician: "Jai has been suffering pretty hard over the last few days with an ischial hygroma – a saddle sore – and whilst we had hoped things would improve, his condition has deteriorated significantly after the stage yesterday. His pain levels are no longer tolerable and with some huge days in the mountains coming up, he cannot continue the race like this."
Thank you for signing up to Cycling News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.