Team Sky's Wiggins dropped out of the top twenty in the overall standings after crossing the line a disconsolate figure more than a minute behind his main rivals in the undulating 177km stage from San Salvo.
A dramatic day of multiple crashes and numerous attacks saw Lotto Belisol's Hansen take the biggest win of his career as Spaniard Benat Intxausti (Movistar) moved into the pink jersey.
With overnight leader Luca Paolini (Katusha) coming home in the same group as Wiggins, Intxausti now leads Italy's Vincenzo Nibali (Astana) by five seconds and the Canadian defending champion Ryder Hesjedal (Garmin-Sharp) by eight seconds.
To make matters worse for Team Sky, Colombian duo Rigoberto Uran and Sergio Henao both followed their leader's nosedive down the standings after easing up to pace Wiggins to the finish.
The decisive crash occurred just 5km from the finish as Wiggins was chasing back onto a select group of riders after losing touch on the last of four categorised climbs.
Escapee Emanuele Sella (Androni Giocattoli) had come a cropper on the same tight right-hand bend just moments before - and Wiggins fell on the inside of the hairpin as he fought to hang on as his rivals put him under pressure.
The group - which contained the likes of Nibali, Hesjedal, Intxausti, Cadel Evans (BMC) and Michele Scarponi (Lampre-Merida) - pressed on towards the line in pursuit of lone leader Hansen.
Uran and Henao dropped back once they noted Wiggins's absence - but the incident came too close to the finish for the trio to fight back into contention. 33-year-old Wiggins gingerly completed the descent taking no risks before joining his team-mates for the flat run into Pescara.
Wiggins is now 1:32 down on Intxausti in the overall standings ahead of Saturday's all-important 55km individual time trial - for which he is, on paper, the outright favourite.
The drama involving last year's Tour de France winner took the gloss off a quite brilliant ride by Hansen, the only rider in the professional peloton to complete all three Grand Tours last year.
The 31-year-old Australian was part of a six-man group that broke clear of the peloton 13km into the short but relentlessly up-and-down stage.
Teaming up with Ioannis Tamouridis (Euskaltel), Maarten Tjallingii (Blanco), Dominique Rollin (FDJ) and Pim Ligthart (Vacansoleil-DCM), Hansen and Sella combined well to build up a maximum lead of seven minutes.
Despite passing through numerous hilltop towns and tackling a succession of leg-sapping climbs, the riders did not reach the first of four categorised ascents until they had already clocked up 115km.
The Gods were not smiling down on the peloton - with the arrival of the steep climbs coinciding with heavy rainfall.
Chasing the king of the mountain points for the blue jersey competition, Sella jumped clear of his fellow escapees on the Cat.3 Chieti-Pietragrossa climb (7.8 per cent with a maximum gradient of 16 per cent) around 40km from the finish.
Hansen joined the controversial Italian on the front of the race as the other four fugitives started to falter. Italian wildcard team Vini Fantini sent Fabio Taborre up the road as a launchpad for either Danilo Di Luca or Matteo Rabottini - both Pescara natives.
But by now the weather was beginning to cause chaos on the road. Sella crashed on a tight bend with 30km remaining and struggled back onto the wheel of Hansen ahead of the penultimate climb.
With Sella tiring, Hansen rode clear to cross the summit three minutes ahead of the chasing pack. Knowing his team-mate Taborre was up the road, Di Luca attacked from this select group to spark a response by the race favourites.
On the final climb of the day, Astana sent Estonian national champion Tanel Kangert forward, with Di Luca busting a gut to ride in his wheels.
As the rain lashed down, Nibali attacked on the final descent only to slip onto his side on a left-hand bend. The 2010 Vuelta a Espana winner swiftly got back on his bike to continue heaping the pressure on Wiggins, who at this time was struggling to maintain contact with the other favourites.
Sella crashed a second time 5km from the finish as he made his last-gasp effort to reel in Hansen. Moments after he remounted, the chasing group returned - and Wiggins, toiling away on the tail, suffered the same fate as Sella.
By now, Hansen was well on his way to the biggest win of his career. The former HTC rider had time to smile at the cameras and salute the crowd as he came home, a mixture of disbelief and joy on his face.
"When we had a good advantage in the break I thought we had a good chance at staying out," Hansen said after his victory. "I don't usually climb badly when I'm in a breakaway. Lotto Belisol have won a stage here in the Giro for the last four years and this time I'm the lucky one."
Enrico Bataglin, winner of Wednesday's stage five, out-sprinted local boy Di Luca to take second place as the chasing group came home 1:07 down on Hansen.
Wiggins and Paolini crossed the line more than a minute later with the pink jersey dropping to 15th on GC and Wiggins disappearing out of the top 20.
Australia's Evans, the 2011 Tour champion, rose to sixth on GC just 16 seconds behind Intxausti and three seconds ahead of seventh-place Dutchman Robert Gesink (Blanco).
British Olympic time trial gold medallist Wiggins will hope to regain his lost time on Saturday's 55km time trial - although it remains to be seen what physical and psychological damage his crash has done.
Prior to the 96th edition of the Corsa Rosa everyone was talking about Wiggins using his time gain from the ITT as a cushion heading into the mountains.
A week into the Giro, Wiggins will need to take all the time he can get merely to move back on level terms as his rivals in what is proving to be an intriguing race.