The Australian quit due to back pain while trailing 6-4, 3-0, having had on-court treatment after the seventh game of the opening set.
Wawrinka now moves into position for a possible second trophy of the season after winning in Chennai to start the year.
The French Open champion will face either sixth seed Feliciano Lopez, who advanced in the quarter-finals when Novak Djokovic was unable to continue due to an eye infections, or former Australian Open finalist Marcos Baghdatis.
Kyrgios ran out of puff after winning his first career ATP title last week in Marseille and travelling directly to the Gulf; his win streak of nine consecutive matches was ended by Wawrinka in 44 minutes.
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Kyrgios now faces a race against time to be fit for next weekend's Davis Cup first-round tie against the United States in Melbourne.
There was no sign of any hard feelings between the outspoken Kyrgios and Wawrinka as they played for the first time since the Australian insulted the Swiss's girlfriend during a heated match last August in Montreal.
The 30-year-old Swiss earned his third break for a 5-4 lead and served out the set in the next game.
Kyrgios's level dropped in the second set, with the 20-year-old ranked 33rd giving up after losing three straight games.