Saville called for a medical timeout at the change of ends trailing 4-1 and after a brief spell off court returned to inform Sakkari and the chair umpire that she was retiring.
The 28-year-old Australian had her left thigh heavily strapped during the match and was visibly hampered in her movement.
The resurgent Saville, who has overcome chronic achilles pain to return to the tour, was unable to convert three break-point opportunities in a 13-minutes opening game and then dropped her serve to go further behind.
The qualifier had defeated two seeded players in Indian Wells to advance to a meeting with world No.6 Sakkari.
She recorded her first Top 10 win since 2018 by accounting for Ons Jabeur and followed that up by defeating Elise Mertens in the third round.
Her run in Indian Wells will result in a jump of 160 places to 249th in the world rankings.
In other fourth-round action, former world No.1 Simona Halep dispatched Sorana Cirstea 6-1 6-4 while third-seeded Iga Swiatek notched her third straight comeback victory.
Halep, who won the event in the Southern California desert seven years ago, cruised past fellow Romanian Cirstea but Swiatek had to dig deep to outlast three-time major champion Angelique Kerber 4-6 6-2 6-3.
"I felt like she wanted to use her experience and kind of trick me," Swiatek said.
"I like that because it's like a new experience for me. I'm pretty proud of myself that I could win against such a smart player."
American hope Madison Keys beat British qualifier Harriett Dart 6-1 6-4 while Petra Martic of Croatia upset Liudmila Samsonova 7-6 (8-6) 6-4.
with AP
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