The crash occurred about 8.30pm on the corner of Paterson and St John streets. The streets were closed from Monday night into Tuesday morning, and reopened about 8am.

Tasmania Police Northern Commander Brett Smith said the police vehicle was under lights and sirens and responding to an urgent job when the crash occurred.

"The police vehicle was travelling East on Paterson Street, the other vehicle, a Hyundai, was travelling South on St John Street," he said.

"The collision occurred, it would appear, midway through the intersection."

There were four passengers in the Hyundai. The officer was the sole occupant of the police vehicle.

It is understood two pedestrians, a male and a female, were on the south-east corner of the intersection when the crash occurred.

It was not known if the pair were known to each other.

The male pedestrian died as a result of the crash.

The female pedestrian was taken to the Launceston General Hospital in a critical condition along with the male police officer.

However, his injuries were not understood to be life-threatening, Commander Smith said.

"I do extend our deepest sympathy to the family of the deceased. This is an absolutely terrible situation to occur," he said.

Northern Commander Smith said a full professional standards investigation would be conducted.

Police and emergency services remained at the scene late into Monday evening.