The Spaniard had started the day right on Sebastien Ogier's tail in the fight for the rally win.
Sordo put Ogier - winner of the last two World Rally Championship rounds - under increasing pressure on Friday and was chasing his first victory at world level.
He was closing on Ogier again at the opening splits of stage six before damaging the rear of his Citroen DS3.
Both Sordo and co-driver Marc Marti were unhurt in the accident.
Their departure means Volkswagen now holds a one-two, with Ogier leading team-mate Jari-Matti Latvala.
M-Sport Ford's leading driver Thierry Neuville also retired on the Santana da Serra stage.
The Belgian, who had been running fifth, hit a rock.
M-Sport had been fighting for the win with Mads Ostberg on Friday but the Norwegian rolled while holding a narrow lead over Ogier.