After a close fight, Billy Joe was gaining momentum coming into the later rounds but a well timed counter from the Mexican caused an uncomfortable swelling over the right eye for the Brit.
It was a record breaking night for boxing as 73,126 were in attendance at the AT&T Stadium in Texas, the biggest crowd for an indoor boxing event since 1978 when Muhammad Ali faced Leon Spinks in New Orleans (63,352).
Billy Joe's trainer Mark Tibbs withdrew his fighter from the fight. It is believed that Saunders, 31, fractured his orbital bone.
Many watching from home were confused to why the fight was stopped, but similar injuries that have happened in the past to other fighters such as Daniel Dubois and Kell Brook proved the seriousness of eye injuries in the sport.
"I think I broke his cheek.. I guessed in the corner and told my trainer Eddie Reynoso 'I broke his cheek'." Said a victorious Canelo post-fight.
Prior to the fight being stopped, Saunders mocked Canelo throughout the fight and often bobbed and weaved the onslaught the Mexican was throwing.
Canelo, 30, kept his patience and eventually landed the shot to seal the fate of the evening, boxing fans felt robbed of a great fight but the safety of the fighter always come first.
Alvarez, who was up on all three scorecards would've undoubtedly been the favourite if the fight went the distance, he now looks ahead to claiming the last available belt in the 168-pound division.
With 59 fights and 56 wins, Canelo stated his intentions to face the IBF champion, Caleb Plant.
He would become the first Mexican in history to hold all four belts at super middleweight if he was to claim victory over Plant, 28.
The Mexican proved his pound for pound king status and did his home nation of Mexico proud during the Cinco de Mayo holiday weekend.