"I am ending my active career," Austria's most decorated Olympian said on Friday. "I am making a jump into a new life and I am looking forward to it."
Morgenstern (27) had a bad landing during a World Cup in December, suffering facial cuts, bruises and a broken finger, and four weeks later a ski flying training crash resulted in skull and lung injuries.
He recovered to help Austria to silver behind Germany in the team event at Sochi.
The Carinthian said he made his decision to quit when he noticed during summer training that he had become afraid of the more challenging jumps.
"I want all the positive memories to prevail," said Morgenstern, who won 14 medals at major championships and is one of only four athletes to have won the four biggest ski jump competitions – Olympics, world championships, overall World Cup, and Four Hills Tour.
Austria coach Heinz Kuttin said Morgenstern "has made the right decision."
Morgenstern has a one-year-old daughter and said he was planning to spend more time with his family.
"My whole life was dedicated to ski jumping. I had no Plan B," said Morgenstern, who holds a pilot's license for small aircraft and helicopters. "Flying is my passion, so I will spend some more time in the air."