The person spoke on condition of anonymity, because Yao has not announced his plans. Yao has scheduled a July 20 news conference in Shanghai to talk about his future.
Yahoo! Sports first reported that Yao is retiring. The person says neither Yao nor his representatives have informed the league office of Yao's decision, and the league says Yao has not filed paperwork that would make his decision final.
Neither the Rockets nor the league are allowed to comment on Yao's decision because of the lockout.
The 7-foot-6 Yao was the top overall pick in the 2002 draft, but his promising career was cut short by foot and leg injuries.
He sat out the 2009-10 season, then lasted only five games in 2010-11 before sustaining a bone bruise and fracture in his left ankle. He underwent surgery in January, and was hopeful to return to Houston this season, even though his contract expired.
But Yao turns 31 in September, and the person close to him said Yao decided the risk of another injury and subsequent rehab was too great.
"There is no way he will come back," the person wrote in an e-mail. "His body can't hold that, and if he plays again, there is risk to get hurt again. Yao does not want to take another surgery. He is done."
Yao was an eight-time All-Star, and averaged 19 points and 9.2 rebounds in eight seasons. He was already an international star before the Rockets made him the top overall pick, and he answered skeptics by earning first-team, all-rookie honors.
Yao played in the postseason four times, and helped Houston win a first-round series in the 2009 playoffs for the first time since 1997. He ranks second in team history in blocks (920) behind NBA career leader Hakeem Olajuwon, and ranks sixth in points (9,247) and rebounds (4,494).
But his impact on the NBA transcended statistics, as he evolved into a global icon, and expanded the league's reach throughout China and across Asia.
Merchandise sales and TV ratings for games skyrocketed, and Yao's presence in the league helped several other NBA players secure shoe contracts in China.
The first speculation of Yao's retirement triggered a frenzy in China. Thousands of fans flooded online forums on Saturday reacting to the news. One wrote: "He's China's top athlete ... it's a pity to lose such a sports icon." The country's most popular online portals, sina.com and sohu.com, headlined the news of Yao's possible retirement prominently on their home pages.
Yao's life was intensely scrutinized in his home country. When Yao's wife, Ye Li, became pregnant, Chinese fans wondered if the baby would be born there or in America, and Yao said the couple's decision would be a "private" matter. The baby girl was born in Houston in May 2010.
John Huizinga, one of Yao's American agents, would not confirm the early reports of Yao's decision to retire, out of respect for Yao's privacy.
"The guy has worked very hard, he's put up with a lot, carried a lot of burden for a lot of people," Huizinga said. "I think he would like to run this part of his life the way he'd like to run it. I understand other people don't feel that way. I don't like it, but I'm not going to be able to change it."
Other times, Yao embraced the spotlight, and was eager to show his national pride.
He carried the Olympic torch through Tiananmen Square and carried his country's flag during the opening ceremony for the Olympics in Beijing in 2008.
He broke his left foot late in the 2007-08 NBA season, but hurried his recovery so he could play for his team in those Olympics. Yao guided China to the quarterfinals, averaging 19 points and 8.2 rebounds in six games.
Yao also donated $2 million to set up a foundation to rebuild schools destroyed by the earthquake in Sichuan province in May 2008.
Marc Ganis, president of Chicago-based consultancy SportsCorp, said Yao became "the embodiment of the cultural aspirations of the Chinese society," through his work ethic, humility and team-oriented attitude.
""There's never been anything like him before," Ganis said, "and I doubt we'll ever see anything like him again."
Former Rockets coach Jeff Van Gundy, now a television analyst, said Yao deserves Hall of Fame consideration, not just for his statistics, but for his unprecedented impact on the game. Van Gundy coached Yao from 2003-07.
"He's been one of the greatest ambassadors to ever set foot on an NBA floor," Van Gundy said. "This guy touched so many people, and really opened doors in China, not only for himself, but for so many others.
"In his eight years, he accomplished as much as any player has ever accomplished," Van Gundy said. "He was the real deal, as a player and as a person."