Honda rider Cornejo had held a substantial 11 minute lead heading into the 342km test between Neom and Alula, with a maiden win in his sight.
But the Chilean rider suffered a major crash 252km into the stage and, although he was able to make it to the finish, it was later announced that he has been forced to retire due to a “risk of concussion.”
Organiser ASO said that Cornejo “was not feeling well”, with sources close to the rider telling Motorsport.com that he had received a heavy hit on his head in the crash and was airlifted to a hospital after his arrival.
As the third-last stage of Dakar began, Benavides grabbed the lead despite starting first on the road, with reigning champion Ricky Brabec and Cornejo following closely behind in second and third respectively.
But as the hilly part of the stage began, Brabec shined on his Honda, leaving teammate Benavides nearly five minutes behind by the 126km mark.
From there on, the American rider maintained his control over the field, winning the stage by 3m15s from another Honda rider Joan Barreda, as Benavides slipped to third.
Benavides now leads the rally overall by 51s from Brabec, with Cornejo officially classified another 16s down in third after losing 17m on the stage, although he won’t take any further part in the rally.
KTM privateer Skyler Howes was the marque’s top finisher on Stage 10 in fourth, leading factory riders Matthias Walkner and Daniel Sanders and the Yamaha of Adrien van Beveren.
Sam Sunderland was only eighth, 12m down on Brabec, but remains KTM’s top rider in the overall standings in fourth, 10m36s behind new leader Benavides.
Sherco rider Lorenzo Santolino finished ninth on the stage, beating the Hero entry of Joaquim Rodrigues.
Standings after Stage 10 (Top 10 only):
Jose Ignacio Cornejo*
Adrien van Beveren
*Won’t take any further part in Dakar