Home Secretary Shabana Mahmood said Guildford had done “the right thing” in retiring.
“The findings of the chief inspector were damning,” the Birmingham Ladywood MP said. “They set out a catalogue of failings that have harmed trust in West Midlands Police.”
She thanked him for his years of service and paid tribute to the work of officers at the force who “keep their community safe every day”.
“Today marks a crucial first step to rebuilding trust and confidence in the force amongst all the communities they serve,” she added.
The Campaign Against Antisemitism has also called for Foster to resign.
In a statement, chief executive Gideon Falter accused West Midlands Police of having “lied and obfuscated, victim-blaming Jews instead of taking on the Islamists”.
“His retirement, after the pitiful failure of West Midlands Police and Crime Commissioner Simon Foster to sack him, should result in the resignation of Mr Foster as well,” he said.
The Independent Office for Police Conduct said it would continue to look into the force’s actions following Guildford’s retirement.
Director general Rachel Watson said it had been examining a “wealth of evidence” and would assess whether any independent conduct investigations should be carried out.
“If that is the case, we’ve said we are prepared to use our powers of initiative to independently investigate in the absence of formal referrals,” she added.