"They just found a little bit of heat in his leg and it might be that he feels better in a week or two, but you'd be risking everything if you carried on".
As a result his stablemates from the Colin Tizzard yard, Native River and Cue Card, now head the betting at 3/1 with the Willie Mullins trained Djakadam, who was runner up in 2015 and 2016 next in the betting at 5/1.
Thistlecrack's recent dominance over the fences included victory on Boxing Day in the King George Vi Chase at Kempton.
Tizzard said: 'Thistlecrack is out for the season, unfortunately.
Ridden by Tom Scudamore, who has partnered him in 12 starts, Thistlecrack suffered his first defeat of the season, when beaten by Many Clouds in the Cotswold Chase at Cheltenham in January.
Trainer Colin Tizzard announced the news on Tuesday after a problem was detected on Monday, the scans confirming the news that his season was over.
Annie Power, Faugheen and Min are also out of the Champion Hurdle, the festival does not need any more withdrawals.
Thistlecrack, the favorite for the Cheltenham Gold Cup, will miss the race because of a leg injury.
Also absent will be Sprinter Sacre, victor of the 2016 Champion Chase, and Vautour, successful in the 2016 Ryanair Chase.