The paper introduces an efficient model for progressive failure analysis of cross-laminated timber panels under out-of-plane bending load. To provide the computational efficiency, the model kinematics is based on the full-layerwise plate theory of composite materials, providing 3D stress and strain fields necessary for accurate prediction of damage initiation and progression. Damage initiation and associated failure mode on the lamina level are determined using the 3D Hashin failure criterion, while the post-failure behaviour is described using a smeared crack band model introducing the bilinear strain-softening curves. The model allows capturing different timber response in tension (brittle) and compression (ideally plastic) in the entire considered (3D) domain. The computational analyses are performed using an original layered finite element framework, while the model validation is done through the extensive experimental testing programme on full- scale CLT specimens. Excellent agreement of obtained load–deflection curves and strain distributions verified that the proposed methodology can be efficiently applied in progressive failure analysis of mass timber, but also in other layered beam- and plate-like structures in bending.