— In block-fading transmission, the discrete-time taps of time-varying channels can be generally modelled as a stationary random vector process with unknown and rank-deficient correlation matrix. The model applies to single/ multi-antenna systems for single/multi-carrier modulation. In this paper, we propose a hybrid estimator that sequentially estimates the (deterministic) rank-deficient channel correlation matrix and the (random) channel taps. In addition, we derive a bound on the corresponding estimation error by adapting the Cram´er Rao bound (CRB) to the case of mixed deterministic and random parameters (Hybrid CRB). Finally, we assess that the proposed estimator is statistically efficient through comparison with the Hybrid CRB.