Paramedics at the scene say one person was transferred to the Ballarat Base Hospital, while another man, aged in his 20s, in the same car died as a result of the collision.

An air ambulance took another another person to the Royal Melbourne Hospital around 8am  after landing at the scene. 

The crash occurred between a four wheeled drive utility and a small sports utility vehicle.

The accident occurred on a straight stretch of road to the northern side of the town  near the intersection with Whites Road shortly before 7am.

The Glenelg Highway has been closed in both directions and it is believed it could be closed for a large part of the morning. 

The Police Major Collision Investigation Unit will be attending the scene later this morning.