The accident occurred at the junction of the Bass Highway with Lillico Road, just west of Devonport, at about 11.35 am.

Police say the collision involved a green Daewoo Nubira sedan which was attempting to cross the west bound lanes and enter Lillico Road when a blue west bound Mitsubishi Magna collided with its passenger side.

Both vehicles then travelled over a number of raised traffic islands and hit a number of road signs before coming to rest on the southern side of the highway.

As a result of the collision the front seat passenger of the Daewoo, an 84-year-old female from Ulverstone, was killed instantly.

The 79-year-old male driver of the Daewoo, also from Ulverstone, died a short time later en-route to hospital.

Police said there were five occupants in the Mitsubishi, two adult females and three children aged 4, 3 and 22 months.

All were from Ulverstone and all were taken to the North West Regional Hospital at Burnie with minor injuries.

Police said that at the time of the collision the road was dry and the weather was fine and clear.

Traffic was diverted through Cutts Road and Forth for approximately 2 hours while investigations took place and the scene was cleared.

Accident Investigators has asked anyone who witnessed the collision or saw the two vehicles beforehand to contact the Burnie Police Station on 64345211 or 131444.

The names of those involved have not been released. A Coroner's s inquest has been opened into the matter.

In a separate incident a man is in as serious condition after a single vehicle crash on East Cam Road, at Burnie, around 5am.

The crash occurred when a 1991 maroon Mazda 626 sedan traveling in a westerly direction left the roadway before colliding with a wooden fence.

The driver, a 20-year-old Burnie man, received serious head injuries and was taken to the North West Regional Hospital, Burnie, in a critical condition.

He was later transferred to the Royal Hobart Hospital where he remains in a critical condition.

The front seat passenger, a 20-year-old Burnie man, was not injured.

Anyone with information on the accident is asked to contact Burnie Accident Investigation Services on 64 34 5276 or 131 444.