Farlow clocked 8:41:53, 10 minutes ahead of Whyte, with Aucklander Kieran Doe another six minutes behind in third.
Farlow, a Canberra-based professional, showed his class with a steady performance that brought him from three minutes behind in the swim to an emphatic win. He was clearly spent at the finish.
While disappointed he couldn't defend his title, Whyte said he was pleased with a day that saw him racing solo much of the race and unable to pick up the pace on the run as he'd hoped.
Whyte vowed to return next year, and took time at the finish to thank the crowd that thronged Wanaka's lakeside Ardmore St. "Thanks to the people of Wanaka for making me feel like I'm on my home ground," he said.
The women's race was dominated by three-time Challenge Wanaka champion Gina Crawford of Christchurch, newly returned to full-time racing after giving birth to her first child six months ago.
The 30-year-old exited the water in 54:21 and was never headed, reaching the finish in 9:44:06 after holding off a hard-charging Britta Martin on the run to take her fourth Wanaka title.
The sixth-year race saw 1300 athletes from 30 nations competing in the half-distance and full-distance triathlons.
The race covers a 3.8km swim in Lake Wanaka, a 180km bike ride past the lake and through spectacular Southern Lakes and Central Otago scenery before wrapping up with a two-lap 42.2km marathon run along the Clutha River and lake's edge.
Results
Challenge Wanaka (3.8km swim/180km cycle/42.2km run)
Men: 1) Aaron Farlow (AUS) (50:43/4:44:51/3:02:41) 8:41:53; 2) Jamie Whyte (NZL) (51:31/4:47:45/3:08:55) 8:51:53; 3) Kieran Doe (NZL) (47:44/4:50:23/3:15:42) 8:57:17; 4) Courtney Ogden (AUS) (51:38/5:04:45/3:07:37) 9:08:42; 5) Jimmy Johnsen (DEN) (52:50/5:07:09/3:04:59) 9:09:05.
Women: 1) Gina Crawford (NZL) 9:44:06; 2) Britta Martin (GER) 9:47:39; 3) Simone Maier (GER) 9:57:42; 4) Candice Hammond (NZL) 9:58:39; 5) Julia Grant (NZL) 10:01:49.
