The 29-year-old Samoa international joined the Aviva Premiership side in April 2015, scoring one try in 19 appearances thereafter.
"I was devastated to receive the news and it has been hard to come to terms with," Stanley said in a statement today. "I'd like to thank all the staff involved with Quins for their unwavering support. Especially the strength and conditioning and Medical staff for their exhaustive efforts with my rehabilitation.
"I'd like to thank my family and my wife Eva, for their unrelenting support throughout my career. It has been an honour to have had the opportunity to play at the top level, and ultimately finish my career at a famous club such as Harlequins. I have many special memories and wish the Club all the very best going forward."
Harlequins' director of rugby John Kingston added: "Winston has been the ultimate consummate professional in his time at Harlequins. It is, therefore, really very upsetting to have to accept the news that injury is forcing his retirement.
"He is a man who has always given his all to the club, forever putting the group ahead of himself as an individual in the list of priorities. He will be much missed as a player but also as a person. Winston will always be welcome back at The Stoop in the years to come and, on behalf of everyone at Harlequins, we wish him and his family all the very best going forward."