Thiem, a French Open finalist in 2018 and 2019 and runner-up at the Australian Open in 2020, hopes to retire at his home tournament in Vienna in October.
He was ranked as high as third in the world and claimed important wins over all of the ‘Big Three’ – Roger Federer, Rafael Nadal and Novak Djokovic.
“I’m here now retiring pretty young, but I’m really happy with the career I had,” said Thiem.
“I never expected that it’s going to be that successful, so I don’t have really any regrets, and I’m good with that.
“I think that the thing I will miss the most is the feeling after winning a great match – it’s not really comparable to anything else.”
Thiem’s rival and friend Zverev overcame a second-set wobble to progress later on Monday.
Zverev, still searching for a first Grand Slam title after finishing runner-up to Carlos Alcaraz at the French Open in June, beat compatriot Maximilian Marterer 6-2 6-7 (5-7) 6-3 6-2.
Norway’s Ruud beat China’s Bu Yunchaokete 7-6 (7-2) 6-2 6-2, while Italy’s Matteo Berrettini was a 7-6 (7-2) 6-2 6-3 winner against Spain’s Albert Ramos-Vinolas.
Berrettini will face 12th seed and home hope Taylor Fritz, who beat Camilo Ugo Carabelli 7-5 6-1 6-2, next.
Sixth seed Andrey Rublev of Russia also progressed, beating Brazil’s Thiago Seyboth Wild 6-3 7-6 (7-5) 7-5.
However, 15th seed Holger Rune was stunned 6-2 6-1 6-4 by Brandon Nakashima of America, while 27th seed Alexander Bublik lost 6-4 3-6 5-7 6-3 6-4 to China’s Shang Juncheng.
Argentina’s Diego Schwartzman, who intends to retire from tennis next year, lost 6-7 (2-7) 6-2 6-2 6-1 to France’s Gael Monfils.
Meanwhile, American home hope Frances Tiafoe was taken to four sets by compatriot Aleksandar Kovacevic before closing out a 6-4 6-3 4-6 7-5 win.
Bulgarian ninth seed Grigor Dimitrov secured a 6-3 6-4 6-2 victory over Frenchman Kyrian Jacquet, while Olympic bronze medallist Lorenzo Musetti triumphed 7-6 (7-3) 1-6 6-1 7-5 against American Reilly Opelka.
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