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"We were friends for years but found ourselves incompatible as fiances," Mirza, 23, who was engaged to Sohrab Mirza, 24, last July, said in a statement from her home town of Hyderabad.
"I wish Sohrab the very best in life."
Mirza's father, Imran, said the respective families, who had known each other for years, remained on good terms.
"Despite the engagement not working out, the friendship continues," he said.
The date of the wedding had not been fixed, but the broken engagement came as a surprise since Mirza had said last week that she planned to quit tennis after her marriage.
"It's a long way off, but after you marry your priorities change and I would like to live with my husband, not be on the road for 35 weeks a year," Mirza said after her first-round loss at the Australian Open.
Mirza became an instant hit across India as an 18-year-old in 2005 when she became the first woman player from her country to win a WTA Tour title.
She reached a career-best ranking of world number 27 in 2007, but her game fell apart since then due to injuries, and was this month ranked 57th.
A Muslim, she has attracted criticism from Islamist groups in India for wearing short skirts on court.
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