A man from the Hunter Valley, aged in his 40s, has died, and his wife is in a critical condition, after being involved in a two-vehicle crash involving a police car.

The pair were walking along Paterson Street in the CBD about 8.30pm when a police vehicle entered the intersection with lights activated.

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At the same time, a silver Mitsubishi Lancer entered the intersection and the two cars collided. This caused the police car to spin out and roll, hitting the two pedestrians at the same time.

The officer, with more than a decade of experience, was on his way to an urgent duty call out.

Bystanders offered assistance to those who were injured, with Tasmania Police describing it as a "significantly traumatic" scene.

On Tuesday, the woman was transferred to a Victorian hospital in a critical condition.

The police officer and a passenger of the Lancer, which had three other occupants, were also taken to the Launceston General Hospital with non-life threatening injuries.

The officer has since been released from hospital, however he had not yet been interviewed on Tuesday afternoon.

The occupants of the Lancer were from George Town.

The driver and two adult children in the rear of the vehicle were taken home by the police on Monday evening. It is understood the female front-seat passenger has injuries to her sternum and remains at the LGH.

Tasmania Police acting Deputy Commissioner Jonathan Higgins said the officer might be interviewed on Tuesday but it would depend on his injuries. There is no issue with having lights, without sirens, Mr Higgins said.

"You can have one without the other. It can be a combination of both," he said.

"There is also an exemption of the road rules for [police to enter red lights]."

Mr Higgins said the officer makes the decision of whether the turn on the lights and sirens, or just one when they receive the call. He said it's part of the risk assessment officers do when they are first called for assistance.

A Professional Standards interview started on Monday evening, with a team from Hobart. It is unknown how long the investigation might take.

"It'll be as long as it takes to fully investigate, it could be months," Mr Higgins said.

"This will be fully investigated and there will be no stone left unturned."

It is the second crash involving a police car under lights in Launceston. This incident follows a crash on December 25, where a police vehicle hit a tow truck.

"These are unfortunate. But unfortunately policing is a very risky business. Police officers have to do considerable risk assessments when attending incidents," Mr Higgins said. "Going through intersections on urgent duty drives is sometimes necessitated."

There are a number of criteria in the urgent duty driving instructions and procedures for police officers to follow.

The officer has not been stood down, and Mr Higgins does not know if the officer will be returned to active duty following his recovery.

Northern Crash Investigation Service closed the intersection on Tuesday evening to conduct more investigations.

The Police Association of Tasmania expressed condolences to the family of the pedestrians.

President Colin Riley said members of the association visited the police officer involved at the LGH to offer support and guidance to him and other members involved in the incident.

"The incident involving the police vehicle, another car and the pedestrian was now the subject of a police investigation and subsequent coronial inquiry," Mr Riley said.

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