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Defending Australian Open champion Caroline Wozniacki has lost to Maria Sharapova, the latest chapter in their bitter rivalry.

Caroline Wozniacki and Maria Sharapova's feud shows no signs of abating after the star Russian ended the defending champion's Australian Open campaign.

Wozniacki lost 6-4 4-6 6-3 on Friday to Sharapova, who has set up a tantalising fourth-round showdown with local hope Ashleigh Barty.

It was the pair's first meeting in four years and the first since Sharapova's return from a 15-month drug ban.

Wozniacki was a vocal critic of the way Sharapova was welcomed back into the game and hit out at the US Open for giving the Russian a slew of centre court matches in 2017 upon her return.

Sharapova's agent Max Eisenbud fired back by labelling Wozniacki a "journeyman player".

Wozniacki, who now has a 4-7 career record against the 2008 Australian Open winner, was quizzed about whether the pair were on friendly terms.

"I think our terms are the same as they have always been," she said.

"I think she doesn't really talk to anybody and just, you know, has her team and has her own thing. And that's that."

In a high-quality round-three match with a little more at stake than just a spot in the round of 16, Wozniacki got off to strong start at Rod Laver Arena but couldn't capitalise on a 4-1 lead.

She was ahead 3-2 in the deciding set but was broken twice from there to lose the match that went for nearly two and a half hours.

The Dane was out hit by Sharapova from the back of the court, 37 winners to 10.

"I did my best out there. I was fighting 'til the end. You know, in my head I should have won that first set," Wozniacki said.

"I did all I could. Just came up short. That's sports sometimes.

"You know, she was just a little bit better than me. And that was really it."