"After much thought and consideration, I have made the difficult and sad decision to step back from performing live gigs," the 77-year-old posted on Instagram.
"For some time now it has been increasingly physically challenging for me to sing comfortably and as a result it has taken the joy out of performing, which has always been so important to me."
Braithwaite became an industry legend first with Sherbet and then as a solo act, best known for his version of Rickie Lee Jones' The Horses as well as the hits As The Days Go By and One Summer.
He was inducted into the ARIA Hall Of Fame in 2017.
"Oh darling Daryl what an enormous decision I can imagine it wasn't made lightly," fellow singer Kate Ceberano posted.
"You will be missed on the scene but we celebrate your amazing music and beautiful voice and simply YOU."
Music duo Vika and Linda said Braithwaite had been a special part of their lives.
"You were Vika's very first crush and when she got an A on her piano exam and mum said she could have anything she wanted, Vika marched her right to Brashs to buy Howzat!"
Braithwaite said he had loved being part of the music industry for 58 years, and thanked his "dedicated and loyal" supporters.
Mahalia Barnes, Fanny Lumsden, Vanessa Amorosi and David Campbell were also among those showing their support for the singer.
"Your voice has been a gift to the nation mate. Equalled only by your kindness. Thank you for the inspiration and songs," Campbell wrote.
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