A follow-up flight to reclaim the record occurred on December 16, 1937. With over half the distance flown and the He 119 averaging just under 370 mph (595 km/h), the DB 606 engine quit. The pilots, Nitschke and Hans Dieterle, attempted an emergency landing at Travemünde but hit a drainage ditch. The He 119 was destroyed; Nitschke and Dieterle were injured, but they survived. The engine failure was a result of a faulty fuel transfer switch. After the crash, Heinkel was ordered not to attempt any further record flights with the He 119.
Other He 119 prototypes took over the test flights. He 119s with the new wing demonstrated a top speed of around 370 mph (595 km/h) and a range of 1,865 mi (3,000 km). Despite the floats, the He 119 V3 seaplane had a top speed of 354 mph (570 km/h) and a range of 1,510 mi (2,430 km). The V3 aircraft also had a ventral fin added to counteract the destabilizing effects of the floats. Unfortunately, the German authorities did not have any interest in producing the He 119 in any form because of its unorthodox features. Reportedly, some of the remaining aircraft served as test-beds for the DB 606 and DB 610. The remaining He 119s in Germany were scrapped during World War II.
Late in 1938, the He 119 V2 was shown to a Japanese Naval delegation that expressed much interest in the aircraft. In 1940 the Japanese purchased a manufacturing license for the He 119 along with two of the prototype aircraft. These aircraft were delivered via ship to Japan in 1941 (some say 1940). The aircraft were reassembled at Kasumigaura, and flight tests occurred at Yokosuka. During an early test flight, one of the He 119s was badly damaged in a landing accident, and it is believed the other He 119 suffered a similar fate. While it was not put into production, the He 119 did provide the Japanese with inspiration for the Yokosuka R2Y1 Keiun high-speed reconnaissance aircraft.