The yacht Wild Oats XI sails out of Sydney Harbour during the start of the annual Sydney to Hobart Yacht race, before withdrawing from Australia's premiere bluewater classic. Photo: Reuters/Rolex

Disaster struck for eight-time winner Wild Oats XI as she was forced to retire from the Sydney to Hobart race Tuesday with keel damage, amid favorable winds that saw the leaders chase record times.

It was the second-straight year that the local favorite — the race’s most successful yacht — had to pull out from the grueling 628-nautical-mile (1,163 kilometer) event.

The supermaxi withdrew from the bluewater classic last year after her mainsail ripped, with rival Comanche — which is not contesting the race this year — taking line honors.

The setback also struck months after Wild Oats owner, multi-millionaire Australian winemaker Bob Oatley, died aged 87.

Wild Oats, skippered by Mark Richards, on Tuesday morning was leading the race to challenge the record of 1 day 18hrs 23mins 12secs that it set in 2012.

But as she approached the north-east coast of Flinders Island in eastern Bass Strait, she suffered damage to the hydraulic ram, which adjusts the angle of the canting, or swinging, keel beneath the hull.

The crew were able to manually center and stabilize the keel, but made the decision to withdraw from the race, organizers said.

Perpetual LOYAL — helmed by Anthony Bell — assumed the lead after the withdrawal, with Giacomo in second place ahead of Maserati, Hong Kong businessman Seng Huang Lee’s entrant Scallywag and Beau Geste.