The 32-year-old Thai was diagnosed with the disease a day before challenging 122-pound WBA champion Guillermo Rigondeaux of Cuba in the US last month. After talking to his doctor, Poonsawat was advised to quit the sport.
"According to the doctor, it will take time to cure it," his manager, Niwat Laosuwanwat, said. "At 32, it would be tough for him to remain competitive in boxing. So it is better for him to retire now."
Poonsawat, who is no longer ranked in the WBA, won the title in September 2009 after stopping Bernard Dunne in the third round in Dublin. He successfully defended his title twice in Thailand before losing to Ryo Li Lee in Japan in October 2010.
Last month, he flew to the US in an attempt to win back the title but failed a blood test before the fight and was later diagnosed with thalassemia _ a blood disorder caused by weakened red blood cells which can lead to anemia.
The Sakon Nakhon native leaves the sport with an impressive record of 48-2-0, with 33KOs.
Poonsawat is the second Thai ex-world champion to retire in recent months after former WBC flyweight king Pongsaklek Wonjongkam hung up his gloves in November, following his third-round loss to Filipino Rey Migreno in the defence of his WBC international flyweight title.