Sumo legend Hakuho bid an emotional farewell on Friday after retiring from the ancient Japanese sport, saying becoming the greatest champion of all time had exceeded his dreams.

The Mongolian-born 36-year-old struggled to maintain his stoic composure at times as he reflected on a 20-year career during which he won a record 45 tournaments.

Sitting alongside his stablemaster, Miyagino, who trained him since he moved to Japan aged 15, Hakuho said a persistent knee injury made it impossible to keep competing.

He fought more bouts at sumo's highest rank of yokozuna than anyone in history and said his achievements went beyond anything he had expected.

"When I first came into sumo I had a dream to become a yokozuna," said Hakuho, speaking haltingly and occasionally stopping to compose himself.

"But I never thought I would win 45 tournaments. I just took it step by step and it all built up to become what it did," he added, speaking publicly for the first time since his retirement was announced this week. 

Hakuho has struggled with injury over the past year and underwent two operations on his right knee in the space of eight months.

He missed all or part of six straight tournaments but made a triumphant comeback at the Nagoya Grand Sumo Tournament in July, winning the title with a perfect 15-0 record.

But he revealed Friday that his decision to retire was made midway through that competition, with his knee needing to be iced almost constantly in order to compete.

Hakuho paid a heartfelt tribute to Miyagino, saying his teacher's insistence on mastering the basics of sumo had made him a champion.

"No one really likes practice, to be honest," Hakuho said.

"But I wanted to get stronger and repay my teacher's faith in me. I wanted him to praise me."

Born Munkhbat Davaajargal and the son of an Olympic silver-medal freestyle wrestler, Hakuho made his sumo debut in 2001 and won his first top-division title in 2006.

He was promoted to yokozuna at 22 and overtook the legendary Taiho's record of 32 tournament wins in January 2015.

Hakuho will now serve as an instructor with his Miyagino stable, having taken the sumo elder name Magaki.

"I want to be the kind of instructor who is kind and thinks about the wrestlers he is teaching," he said.

Hakuho also paid tribute to sumo's only remaining yokozuna, Terunofuji, and said he expects the younger generation to take the sport forward.

"More than being happy I became a yokozuna, it means everything to me that I became a sumo wrestler," he added.