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"If the best guy in the world retires it is certainly a sad day," said Austrian Niki Lauda, a triple champion who retired twice during his career.
"You can say whatever you want, he won seven world championships and he might win another one. There is nobody like him in the world, he is unique."
"It's sad that he retires. But I know you have to retire one day and I respect that," added Lauda.
Schumacher, now just two points behind Renault's Fernando Alonso, made his announcement only minutes after his 90th career victory in Ferrari's home Italian Grand Prix on Sunday.
"I always said that the decision to retire would be his alone but now that decision has been taken I feel a sense of sadness," said Ferrari president Luca di Montezemolo in a statement.
"We have lived through some unforgettable times together, some good and some bad, achieving results that will be hard to equal."
Team boss Jean Todt celebrated Schumacher as an "exceptional man (who) will become a legend as a driver."
ULTIMATE PROFESSIONAL
Ferrari's Rory Byrne, the chief designer whose cars took Schumacher to his five Ferrari titles after two at Benetton, said the German would be missed "as a friend and colleague and as the ultimate professional".
"It's the end of Michael's career in Formula One so in that sense, it is the end of an era," the South African told Reuters. "When you look at his record, that's going to be difficult to beat."
Briton David Coulthard, runner-up to Schumacher in the 2001 championship while at McLaren, said winning at Monza was a fitting way to announce his departure.
"Irrespective of whether people are believers in Michael's race ethics or not, you have to recognise he's been a great champion and it's the end of an era."
Mercedes motorsport head Norbert Haug agreed: "For me it is sad to learn that he will retire," said the German, who once employed Schumacher as a sportscar driver. "With his retirement, an era of Formula One racing ends."
Schumacher's younger brother Ralf, a rival at Toyota, saluted his sibling in a team race review.
"I am sure he has thought long and hard about his decision and I respect it," he said. "I've enjoyed racing with him and I wish him all the best both for the championship and the future."
A discordant note was sounded by Renault's engineering head Pat Symonds, who worked with Schumacher at Benetton in his championship years there, when he was asked how the sport would remember the German.
"I don't suppose they will remember him," he said with a smile.
"Everyone should retire at the top," he added. "But I just want to beat him -- I don't care if he's retiring or going to kindergarten, I just want to beat him."