Houvenaghel had targeted a final podium appearance at Glasgow before calling time on her track career, but has been forced to withdraw citing an injury suffered in training.
It's the second major disappointment for the three-time team pursuit champion who won silver in the individual event at both the Beijing Olympics and 2010 Commonwealths in Delhi after she was controversially dropped from Team GB ahead of the 2012 London Olympics.
The Co Londonderry athlete claimed she had been treated "shabbily" and had been promised a ride. She has not been on British Cycling's funding programme since.
She said: "The past decade of my life has been dedicated to professional cycling and it has, for the most part, been extremely rewarding.
"I have always dedicated myself 100% to my role as a natural professional sportsperson, and I am immensely proud of my consistently high achievements from the beginning.
"It is disappointing to have to withdraw from competition at the Commonwealth Games. However, I would like to wish my Northern Irish team-mates every success with their performances in Glasgow.
"It is never easy to make the final decision to end one's sporting career."
The 39-year-old retires to a life in full-time dentistry.
She added: "For me, this decision has been prompted by a training injury, but I will be returning to a profession which I thoroughly enjoy and where, as a woman in my thirties, I will be treated as an equal.
"In the future, I hope to put something back into the sport, but for now I am looking forward to pursuing my career in dentistry."