New Zealand champion King Mufhasa will undergo minor throat surgery after his failure in Saturday's Chipping Norton Stakes at Warwick Farm.
The 10-time group one winner finished 10th of the 12 runners and a subsequent examination showed he had suffered an epiglottic entrapment.
The condition can cause intermittent upper airway issues and King Mufhasa will undergo minor surgery to correct the problem.
Racing NSW stewards said the horse would need a veterinary clearance before he raced again.
The 8-year-old is the reigning New Zealand Horse of the Year.
He was controversially removed from Stephen McKee's stable a few weeks ago and sent to trainer Bruce Wallace.
The best of his three runs this preparation was his third behind star 3-year-old All Too Hard in the Futurity Stakes over 1400m at Caulfield last month.
Wallace told the Herald his stable had been delighted with the way Mufhasa had trained up for Saturday's race.
"He was better for this race than any of his races for us. When he came off the bit at the 1000m and finished so far back we went looking - we knew something had to be wrong.
"The vets originally thought he had heat stroke, but we were lucky we were able to get him properly examined while he was still hot because apparently the ulcers in the throat are only apparent when the area is entrapped.
"He's been throwing his head around even after his work, which now we know what the problem is, is a sign he's been trying to clear the area.
"Fortunately, it's an easy fix and the vets say it could be as little as three weeks before it's all back to normal."
Trainer Stephen Marsh and his syndicate of owners will decide today on whether Ruud Awakening heads to the A$3.5 million Golden Slipper in Sydney on April 6.
Marsh is taking every precaution to ensure Ruud Awakening is at her brilliant best after Saturday's victory in Ellerslie's $200,000 Diamond Stakes.
"So far everything looks to be going very well, she has bounced through the run as we'd hoped, but you don't commit to paying A$150,000 until you are sure every base is covered."
Ruud Awakening was outstanding on Saturday and if the decision is positive she will attempt to become the first New Zealand-trained 2-year-old to win the coveted Slipper.
However, one Kiwi certain to be heading to Sydney is NZ Derby victor Habibi who will attempt to add the AJC Oaks to her already stunning record.
"We never really considered the New Zealand Oaks at Trentham," said co-trainer Dean Logan last night.
"We left her in that race in case there was a problem going into the Derby, but we never really considered the Derby-Oaks double as realistic. "It's too tough. You've got a 12-hour float trip to Wellington for the Oaks versus a six-hour trip to Rosehill."
The major problem with long float trips in New Zealand is not so much getting there, it's getting home.
If Habibi had a hard race at Trentham she would face a tough 12-hour float trip home in the heat.
"You wouldn't have much horse left after that," said Logan.
Habibi will take on the 3-year-old fillies' 2000m Rosehill lead-up to Randwick.
No decision has been made about a rider. "That will be left until closer to the race, but we'd be happy to leave Vinnie Colgan on.
"There won't be any shortage of riders wanting the engagement."
- Additional reporting, AAP