With his health in a quite frail state, Pacheco ran once again for President, in elections in November 1994. This time his running-mate was outgoing Industry Minister (from the Lacalle administration) Eduardo Ache. Pacheco's election result was very poor, but even his marginal result was significant for the Colorado Party to narrowly defeat the National Party and electing once again Julio María Sanguinetti to the presidency.
After the 1994 elections, Pacheco retired from active politics, and only occasionally would make any public appearance. He died on July 29, 1998, being buried with Presidential honours at the Central Cemetery of Montevideo.