Gonsalves' retirement comes six months after an Inspector General's probe determined the commander violated an Army policy that requires treating others with "dignity and respect."
"Maj. Gen. Ryan Gonsalves officially retired 1 May 2018," Army spokeswoman April Cunningham said in a statement.
In July, Gonsalves, who commanded the 4th Infantry Division, was nominated for a third star and was a contender to be the next head of U.S. Army Europe.
The IG determined that Gonsalves, during meetings at his headquarters in Fort Carson, Colo., was dismissive of a female congressional aide, calling the staffer "sweetheart" at one point during the Oct. 2016 meeting.
Gonsalves' nomination was formally withdrawn on Nov. 27.
Gonsalves, who could not be reached for comment and has not spoken publicly about the incident, served for nearly 35 years with assignments that included deployments to Iraq. As head of 4th ID, Gonsalves was responsible for preparing numerous units for deployments to Europe.
In recent years, multiple senior commanders have faced IG probes regarding accusations of misconduct. Often, the accusations deal with sexual improprieties or misuse of funds, and are career ending.
In Gonsalves' case, it was verbal slights that brought an early end to a career that was on the rise.
An anonymous complaint was made to the IG on July 20, days after Gonsalves' nomination for a third star and one week after Stars and Stripes reported he was in contention to serve as the next commander of U.S. Army Europe.
Gonsalves' pending nomination prompted an angry reaction from a staffer of Rep. Jim Langevin, a Democrat from Rhode Island, according to the IG report.
The Army IG report, obtained by Stars and Stripes, redacted the names of the female congressional staffer and about 10 other people who were present during the October 2016 meeting at Fort Carson. The report included testimony from members of Gonsalves' staff who took part in the session.
The complaint cited accusations that Gonsalves took issue with the female congressional staffer's youth, and that the general said she should take detailed notes on why the military needed funding "since she was a Democrat and did not believe in funding the military," the IG report stated.
Multiple members of the congressional delegation described Gonsalves' remarks during the meeting as "sarcastic and unprofessional," the report states. Another male staffer described the remarks as "sexist, inappropriate and unprofessional," according to the report.
At one point during the meeting, the female staffer passed a note to a colleague that read: "Did this guy really just call me sweetheart?" the report states.
Some people in attendance defended Gonsalves, saying he acted professionally.
"Although MG Gonsalves testified that he did not refer to (the female staffer) as 'sweetheart' during the meeting, the evidence did not support his recollection," the IG report states.