The road was blocked for more than an hour. It is now under stop-go management and motorists travelling through the area are being warned to expect delays.
Long queues have now formed as holiday traffic has been forced to a standstill either side of the crash. SH1 was now closed between Rangitata and Timaru.
Holidaymaker Bronwyn Kingsland said they were due to turn off at the intersection where the crash happened when they came to a halt about 100m before the turnoff. They waited in line for around 10 minutes with few cars travelling past them in the opposite direction.
In the end they decided to manoeuvre their vehicle which was towing a boat and bypass the hold-up.
Kingsland said there were up to four ambulances and a fire crew tending to the crash victims.
It follows an earlier crash at Waimate that killed two people.
The two, believed to be the drivers of each vehicle, died at the scene at Glenavy, between Carrolls Rd and Stangers Rd shortly after 8.30am.
Glenavy Volunteer Fire Brigade chief fire officer Bevin Joyce told Fairfax that it appeared a northbound vehicle had crossed the centre line before the crash.
Kurt Brown, who lives about 500m from the crash, told Fairfax that he was having breakfast when he heard a "noisy car" go past.
"We followed the fire brigade about 500m to 1km up the road, and it was just around the corner."