The Briton, who won in Abu Dhabi last year, parked up on the grass after 20 of the 55 laps of the day-to-night race at Yas Marina. McLaren told the 27-year-old the car had lost all power.
It was the second time in five races that Hamilton, who is moving to Mercedes next season in place of the retiring Michael Schumacher, had retired due to a mechanical problem while leading.
In Singapore in September, he pulled over and out with gearbox problems. Sunday's race was the first time he had started on pole position since Singapore. Hamilton started the race 75 points behind Red Bull's double world champion Sebastian Vettel. There are now only 50 remaining to be won from the final two races.
(Reporting by Alan Baldwin, editing by Pritha Sarkar)