Wild Oats XI has retired from the 72nd Sydney to Hobart yacht race, citing a broken hydraulic ram.

The supermaxi was on course for a line-honour record, leading rival Perpetual LOYAL and the rest of the fleet on day two.

Race spokesman Bruce Montgomery said Wild Oats XI was unable to move its keel after a hydraulic ram broke.

“It’s the gear that operates its canting keel, which is the keel that swings under the boat,” he said.

We can confirm we have had to retire from the race- most importantly all crew onboard are safe. More details to follow. https://t.co/1p9UJ37NkA

— Wild Oats XI (@WildOatsXI) December 26, 2016

“If you can’t move it, especially if it’s in the wrong position, it can be potentially dangerous.”

Mr Montgomery said Wild Oats XI’s crew had been trying to repair the fault “for a couple of hours”, to no avail.

“As far as I know she’s heading back to Sydney.”

He described the shock retirement as a major blow.

After last year’s disaster, this is the last thing they need.

A similar early retirement by Wild Oats XI from last year’s race due to equipment failure saw line honours claimed by rival Comanche.

Perpetual LOYAL on track for race record

Wild Oats XI had overcome a poor start in this year’s race to overtake early leader Perpetual LOYAL.

It was also on track to smash the 2016 line honours record before disaster struck.

Perpetual LOYAL (right) is now leading the fleet. Photo: AAP.

“They’d had a bad start to the race in any case, but they’d caught up and taken over the lead at record pace and [Wild Oats XI] was really heading towards breaking the record by three or four hours,” Mr Montgomery said.

In the last couple of hours Perpetual LOYAL came up and overtook Wild Oats, and now we know why, she was only running at 10 knots instead of her normal 20.”

He said Perpetual LOYAL was about 15 nautical miles ahead of New Zealand boat Giacomo and set to break the race record.

“It’s going to be a fast race for Perpetual LOYAL, but a tragedy for Wild Oats XI.”

Before the race, Wild Oats had boasted of its hydraulic ram technology.

“The hydraulic mechanism is so powerful it can lift a jumbo jet off the ground,” Wild Oats XI’s website said.

The first yachts are now expected into Hobart’s Constitution Dock about mid-morning on Wednesday.