PHILLIP ISLAND, Australia -- Italy's MotoGP world champion Valentino Rossi overcame a 10-second penalty to win his third successive Australian Grand Prix in stunning fashion on Sunday.

Pole sitter Rossi took the lead in the fifth lap of the 27-lap race and soon established a three-second advantage but was handed a 10-second penalty for overtaking under a yellow flag.

Stung by the penalty, Rossi blitzed around the track and gradually increased his lead beyond the 10-second barrier.

The 24-year-old eventually won by the official margin of 5.212 seconds over Italy's Ducati rider Loris Capirossi and American Nicky Hayden, Rossi's Repsol Honda team mate.

"Maybe this was my most exciting race, I don't know. It was great," Rossi told a news conference after throwing items of his riding gear into the rapturous crowd of 40,960.

Rossi, who has won eight of the 15 races this year, clinched his third successive world title with two rounds to spare by winning last week's Malaysian Grand Prix.

Rossi's 21 consecutive podium finishes in the premier class place him one behind compatriot Giacomo Agostini's record of 22.

His 32 premier class grand prix victories put him one ahead of American Eddie Lawson's tally and he now lags behind only Agostini (68), Australia's Mick Doohan (54) and Britain's Mike Hailwood (37).

Rossi said after seven or eight laps of the 27-lap race, he saw his crew hold up a card saying "less 10" and was initially puzzled. "On the next lap I see "P (position) eight" and I think 'why?'," he said.

"I think maybe I had overtaken under a yellow flag, but I didn't see the flag.

"I don't have a problem with the points so I closed my eyes for the last 10 laps. It was great fun."

Early race leader, Australia's Ducati rider Troy Bayliss, crashed and suffered mild concussion in the fourth lap and was taken to hospital for observation.

Spain's Sete Gibernau earned another 13 points for his fourth placing to move to 257 points in second place behind Rossi's untouchable 332.

Gibernau beat Alex Criville's 1996 runner-up record of 245 points.

Italy's Max Biaggi, who was 17th on Sunday, is third in the standings on 215 points with Capirossi in 161. A further 25 points are up for grabs in the final race at Valencia on November 2.

Italy's Roberto Rolfo, 23, moved to outright second in the 250cc standings and kept the world championship fight alive.

The Honda rider beat Australia's Aprilia rider Anthony West by a comfortable margin of 14 seconds with Spain's Fonsi Nieto third.

San Marino's Manuel Poggiali was ninth and has 233 points, seven ahead of Rolfo.

Honda rider Andrea Ballerini completed Italy's hat-trick with a shock win in the 125cc event, the first GP victory of his career.