The #999 GruppeM Mercedes was unstoppable in the all-in, 40-minute session, Engel stopping the clocks at an eye-watering 2m01.053s on his first run.
That eclipsed Shane van Gisbergen's 2m01.286s that had stood as the fastest official GT3 lap time around Bathurst since 2016.
The record-breaking lap helped the #999 entry to provisional pole, which means it will run in the second part of the Top 10 Shootout that will determine pole later today.
The car will be joined in the second part of the Shootout by the #75 SunEnergy1 Racing Mercedes, Luca Stolz and Jules Gounon combining for the second fastest aggregate time in qualifying.
Broc Feeney put in an impressive showing in the #888 Triple Eight Mercedes, he and Maximilian Gotz third fastest on combined times ahead of the #912 Manthey EMA Porsche.
The #32 WRT BMW was fifth fastest on combined times which makes it the final car to run in the second part of the Shootout.
The first part of the Shootout will feature the second WRT BMW as well as two Melbourne Performance Centre Audis, the #65 Pro-Am entry and the #74 Pro entry.
The #77 Craft Bamboo Mercedes and the #44 Valmont racing Mercedes are also set to take part in the dash for pole.
The Shootout klicks off a 4:10pm local time.
