The 18-metre-tall (59-feet) duck on show at Keelung burst around noon and deflated into a floating yellow disc, only 11 days after it went on display.
It was the second time that a giant inflatable duck -- a bath toy replica created by Dutch artist Florentijn Hofman -- had burst while on show in Taiwan.
"We want to apologise to the fans of the yellow rubber duck.... The weather is fine today and we haven't found the cause of the problem. We will carefully examine the duck to determine the cause," organiser Huang Jing-tai told reporters.
The Central News Agency cited an eyewitness as saying the rubber bird might have fallen victim to eagles which scratched it with their claws.
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Three Taiwanese cities exhibited their versions of the yellow duck in 2013. But all were forced temporarily to suspend the exhibit due to bad weather or damage.
Last month the duck on display in the northern county of Taoyuan became a high-profile victim of a 6.3-magnitude earthquake, which triggered a power outage that caused it to deflate when an air pump stopped working.
The duck at Kaohsiung, which attracted four million visitors during a one-month display, was temporarily deflated and lifted ashore as a safety precaution when Typhoon Usagi pounded the island in September.
Since 2007 the original duck designed by Hofman -- which is 16.5 metres tall -- has travelled to 13 cities in nine countries, including Brazil, Australia and Hong Kong, on its journey around the world.