The Arbroath firefighter was bidding for a place in the quarter-finals in his tournament debut after reaching the last 16 courtesy of impressive victories over Diogo Portela, Mensur Suljovic and seventh seed Jose De Sousa.
Soutar got off to the perfect start, breaking Rydz's throw to claim the opening set - the first set the Geordie ace had dropped in the tournament thus far.
However, from then on Rydz proved unstoppable as he claimed the next four sets to dash Soutar's hopes of reaching the last eight.
Despite his exit, the Scot remained upbeat having achieved the target he set himself for the year.
"Top 64 to keep my card was all I was looking at the whole year so to be 51st in the world, sitting here right now, I'm absolutely buzzing with that," Soutar said.
"I'll go back home, put my tail between my legs and feel sorry for myself for a day, but tomorrow will be a different day, I'm back home and back to life. Darts isn't my whole life so I'm alright with that."
Asked what his next target is, Soutar quipped: "World number 1?! No, I'm just going to try play the pro tours and try to qualify for the worlds and players championships, and if you can get yoursaelf in a position to be in the matchplay or the grand prix then that's what I'm focused on. Trying to play in the bigger events because the more you play in that environment, the more you'll be able to deal with it and the better you become."
Rydz could play Soutar's fellow Scot Peter Wright in the quarter-final if he beats Ryan Searle later on Thursday.
Two-time PDC World Champion Gary Anderson is also in action this evening as he battles 2018 winner Rob Cross for a place in the next round.