Dame Alison, 77, has decided to step out of the public eye and spend time with her family.
She had been writing a monthly column for her local newspaper in Orewa, Auckland, but has produced her last recipe for the paper.
Developing recipes and meeting deadlines was becoming too much for her, an editorial in Hibiscus Matters said.
"While she will always be interested in food, Alison's memory is declining, and the deadlines of developing recipes and writing is a stress that she no longer needs," it said.
"The family encourage you to support the work of the Alzheimer's Society and Age Concern, and to share your food and meals with those you love."
The news has prompted tributes to her contribution to cooking.
Masterchef judge and celebrity chef Simon Gault tweeted: "Sad to hear the legendary Alison Holst has retired. A fantastic Kiwi we should be proud of."
Radio host Alison Leonard said: "So sad to hear of #AlisonHolst #dementia diagnosis .... She taught me a nifty trick with preserving. #grateful love to her #family"
Dame Alison published more than 100 books, defining her "everyday cooking", selling more than 3 million copies.
She first appeared on television screens in 1965, a few months after the introduction of television to New Zealand. Since 1990 she has co-written several cookbooks with her son Simon Holst.
In 2011 she was made a Dame Companion of the New Zealand Order of Merit.
- Patrice Dougan of NZME. News Service
