The leaders turned up the pace over the final 2.5km loop in the Barcelona Marina, going nearly two minutes faster than in any of the three previous laps.
"Kane fought hard to hang in there, and it was only really in the final 400m that he ran out of legs. He has worked very hard in the lead-up and this is a much improved performance and his best effort at the worlds. Tactically he was very good.
"It is still a case of work in progress for him and, with three years to the Rio Olympics, there are definite signs that he continues to step up."
Compatriot Phillip Ryan finished 45th in the 65-strong field in 1:51.11.
Tomorrow Cara Baker and Emma Robinson compete in the women's 10km open water swim, with the pool competition beginning on Monday (NZT).
Results of the men's 10km open water swim: Spyridon Gianniotis (GRE) 1:49.11, 1; Thomas Peter Lurz (GER) 1:49.14, 2; Oussama Mellouli (TUN) 1:49.19, 3. Also: Kane Radford (NZL) 1:49.43, 20; Phillip Ryan (NZL) 1:51.11, 45. - APNZ