The 16-time TT winner, who came off his Tyco BMW at the 27th Milestone, was reported to be conscious before being flown to hospital by helicopter.
Hutchinson, 37, was battling for the lead when the race was red-flagged because of the incident.
He won the Superbike and Superstock races earlier in the week.
He has now been transferred to Liverpool for further treatment. The race was re-started and was won by Michael Dunlop.
The Bingley rider, who suffered a fractured femur, is the third most successful rider in the history of the event.
He endured more than 30 operations on his left leg after an accident in 2010 and after a five-year absence from the top step returned to win eight TTs in the last three years.
Hutchinson is the only man to win five TTs in a week, a feat he achieved seven years ago, and followed that up with trebles at the 2015 and 2016 meetings.

The four are now in police custody, after a crime spree that included raids on hotels, small shops and amusement arcades, Italian media report.
On one occasion they allegedly raced off in a Porsche Cayenne after pointing a pistol in the driver's face.
The gang reportedly boasted of their crimes in video clips on social media.
They stole cash, smartphones, tablets and even on one occasion a youth's luxury shoes worth â‚¬530 (Â£465; $601), according to police. The crimes took place in Milan's Quarto Oggiaro district.
Two of the young suspects are Italians aged 14 and 16, the others are of foreign origin, aged 15 and 17.
They came from broken homes and are thought to have been controlled by an Egyptian man, aged 23. He is under arrest on a drugs charge and was convicted for previous offences.
Police found that the youths - dubbed a "baby gang" in Italian media - possessed several firearms, including a pump-action shotgun.
Italy's Rai news website said investigators "stressed that the baby gang used brutal violence on their victims in the style of A Clockwork Orange".
One victim, a young man attacked in the street, was pistol-whipped and needed 10 stitches for a deep wound.
The 1971 film A Clockwork Orange, directed by Stanley Kubrick, was a box-office hit. Based on a futuristic novel by Anthony Burgess, it portrayed a gang of juvenile delinquents who made a cult of gratuitous violence.

Zimbabwe's nine-wicket defeat by Group A winners India on Monday ensured Ireland's place in the top three.
The Irish lost to India and hosts Sri Lanka but beat Zimbabwe and Thailand.
Ireland retain their one-day international status by making the Super Six, from which the top four qualify for the World Cup this summer.
Sri Lanka finished second in the group while tournament favourites India boasted a 100% record from their four games.
Ireland are are also joined in the Super Sixes by South Africa, Pakistan and Bangladesh.
Their next game is on Wednesday when they face Bangladesh, before taking on Pakistan on Friday and South Africa two days later.
Zimbabwe required a victory over India in Colombo, along with a significant improvement to their net run rate, to overtake Ireland and make the last six.
Ireland completed their group matches on Saturday with a 46-run win against Thailand, who ended bottom of the group.
Kim Garth hit an impressive 98 and Laura Delany added 50 while seamer Lucy O'Reilly took 3-28.
All matches played in Colombo & start at 04:30 GMT. CCC = Colombo Cricket Club; MCA = Mercantile Cricket Association Ground; NCC = Nondescripts Cricket Club; PSS = P Sara Oval
Ian Hutchinson has been taken to hospital with a broken leg after crashing on the second lap of Friday's Senior TT on the Isle of Man.
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Italian police say four teenagers accused of 12 robberies in Milan gloried in violence like the notorious gang in the film A Clockwork Orange.
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Ireland have progressed to the Super Six stage of the Women's World Cup Qualifier after finishing third in their group in Sri Lanka.