The 57-year-old, who won more than 30 titles around the world including two Australian Opens, sustained the injury at last week's New South Wales Open and walked off the course on Friday after hitting his drive off the seventh tee.
"It's a tough pill to swallow," said Senior, who won four times on the European Tour and was the Australasian PGA order of merit winner four times.
"The last two years, I've had that many injuries. I'm just sick of it. It's a game you can't play with injuries.
"I've had a great run, a great career. I've enjoyed every minute of it. People have been fantastic, (but) you just can't play like that.
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"I don't enjoy playing like this. I can't hit a shot. Every time I hit the ball I get a bolt of pain through my hip."
Senior, who rolled back the years to win his second Australian Open title four years ago, had intended to retire after next month's Australian PGA Championship.
(Reporting by Nick Mulvenney, editing by Ian Ransom)
