The defending champion appeared to be in control of the rally, gaining a 17.2s lead over Tanaka after winning three of the six asphalt tests before the start of the 15th stage.
However, Neuville missed his chance for a first win in 2022 when he under-swinged left-handed. The Belgian drove into a deep ditch, as a result of which the car was momentarily stranded.
Onlookers rushed to the scene and were able to push the car out of the ditch, but the i20 N sustained significant damage to the front right corner.
A visibly angry Neuville and co-driver Martijn Wydege managed to set off again, albeit with the driver’s door open, before eventually pulling into the driveway.
Neuville is the second high-profile resignation from the day’s action, after M-Sport’s Craig Breen crashed out of fifth position when it ran into a ditch, causing it to roll heavily.
Neuville’s death handed the rally lead to his team-mate Tanaka, who now leads Toyota’s Elphin Evans by 6.3s, with Toyota’s Esapeka Lappi third, 57.7s adrift.
“Huge disappointment for the crew, of course for the whole team, for everyone,” said Hyundai deputy team principal Julien Manse.
“Now we are really not in a position. We really don’t have many words.
Thierry Neville, Hyundai World Rally Team
Photo: McKlein / Images of motor sports
“Okay, we still have Ott in the lead, so it’s not all negative. But definitely not where we’re looking.
“Obviously it was a bit slippery, a mistake, maybe too fast? We have to see Thierry when he comes back and we also have to see what happened to the car and I hope we can fix it tomorrow.”
The WRC crews will have one more stage to complete Saturday’s race.