A 20-year-old Kamarooka woman died overnight after colliding head-on with another vehicle near Raywood yesterday.
The woman was trapped in her vehicle for more than an hour in the two-car head on collision and was flown to The Royal Melbourne hospital with critical chest and abdominal injuries and multiple fractures.
Police confirmed this morning that she died in hospital shortly before midnight.
A report will be prepared for the coroner.
Two children, a seven-month-old boy and an 11-year-old girl, travelling in the same car were taken to Bendigo hospital for observation.
A Bendigo Health spokesman said the two children were in a stable condition and were likely to be discharged later today.
A 40-year-old Queensland man driving the other car was also taken to Bendigo Base Hospital with a suspected broken leg.
Police said a Toyota sedan was travelling west on Elmore-Raywood Road when it collided with a Nissan dual cab coming over a crest, about 4km from Elmore.
The first witnesses on the scene said they arrived to find the woman unconscious and pinned down by the dashboard.
The two men, who wished not to be named, said the driver and passenger of the other vehicle had waved them to stop after they were unable to telephone for help.
They waited with the woman until emergency services arrived.
"They had taken the children out of the car and were running down the road towards us," one witness said.
"Luckily, we were able to make the call. The woman was completely cocooned by the wreckage - all I could see was the top of her head and her hand was sticking out, which I used to check her pulse."
Bendigo SES training officer Brett Walsh said eight volunteers from Bendigo and five from Rochester units worked to get the trapped driver out of her vehicle using hydraulic rescue equipment.
Leading Senior Constable Brendan Keegan said the incident served as a reminder of the importance of a correctly fitted infant car seat.
"Seltbelts and a properly restrained car seat, in this case, has saved the seven-month-old child," he said.
Leading Senior Constable Keegan said investigations were continuing into the cause of the crash.