"We were given approval ... that we were able to go and then subsequently [it was] withdrawn, so we're obviously devastated."
CYCA commodore Howard Piggott delivered the news while Wharington had his phone switched off, the skipper giving his crew a pre-race briefing at the time.
"As everybody turned their phones back on just before 11 o'clock, hundreds of messages from everybody saying, 'It's all over the press, we've been knocked out' - and we were absolutely dumbfounded," Wharington said.
Piggott said Wharington, the boat's owner, had failed to provide the necessary statements that Wild Thing was designed and built in accordance with the American Bureau of Shipping guide.
"The race committee has worked with the owner of the boat, Grant Wharington, to allow him up to three hours prior to the start of the race to provide the documentation required," Piggott said. "However, this has not been forthcoming - the race committee has no option but to not accept the entry of Wild Thing."
Wild Thing had undergone a number of changes and been lengthened to the permitted maximum of 30.4m.
Piggott said the race committee's decision was final.
"We made every effort, I assure you. We want to see boats racing," Piggott said.
"However it's out of our hands, we must comply with the notice of race and ensure that our safety standards are maintained."
Most betting agencies had Wild Thing as third favourite for the race after Wild Oats XI and Ragamuffin Loyal.
Wild Thing had not raced since being modified.
Wharington has had a sometimes strained relationship with the Bluewater Classic.
In 2004 Wharington and his crew were forced to pull the pin on the race due to keel problems and in 2009 the skipper had to race the clock to replace a mast broken during the yacht's delivery from Melbourne to Sydney. Two years ago Wild Thing was involved in a collision with a media boat.
Favourite Wild Oats XI was first out of Sydney Harbour yesterday, ahead of fellow super maxi and defending champion Ragamuffin Loyal.
With spinnakers up, the 76-yacht fleet weaved its way around thousands of spectator craft before heading out to the Tasman Sea for the 628-nautical mile race.
Five-time line honours champion Wild Oats XI's race record from 2005 is one day, 18 hours, 40 minutes, 10 seconds - a time that could be in danger of falling this year, given the favourable weather forecasts.
Ragamuffin Loyal is skippered by 85-year-old Syd Fischer, who is taking part in his 44th Sydney to Hobart race.
-AAP