The crash involved two trucks and a car, and happened near the Cromwell Gorge picnic area on State Highway 8, between Cromwell and Clyde, about 6.35am, police said.
One person was found dead at the scene and one of the truck drivers received a minor injury.
It forced police to close the road for most of the day, causing major disruption to travellers, until it reopened about 4.30pm.
Lake Dunstan Explorer boat owner Andrew Dalton said he saw the accident site while travelling up the lake on his first run of the morning.
"It’s catastrophic. There was a power board truck on its side.
"Close to that, further towards Clyde, is the wreckage of a vehicle. It looks like it’s been attacked with a can opener - it’s unrecognisable.
"Then there are multiple other vehicles up the road, including a Mainfreight B-train."
"He’s OK, but understandably shaken from the incident."
He declined to comment further.
Central Otago Mayor Tim Cadogan said although the accident caused considerable traffic disruption and showed how vulnerable the roading system was in Central Otago, "a life was lost, and that is the most important consideration".
"It’s just horrible for everybody concerned, and terrible that someone presumably went out to go to work today and isn’t coming home tonight.
"That’s heartbreaking and a reminder to all of us about how careful we have to be on our roads and how precious life is.
"I’ve talked to people who haven’t been able to get to work today, and every single one of them has said that their problems are insignificant compared with those who have suffered a loss."
His thoughts were with the family and friends, he said.
The closure created major disruption for many trying to get from Central Otago to Queenstown or Wanaka.
Freight trucks parked up at a layby at the top of Clyde
Hill to wait for the road to reopen, while others took hours-long detours.
Those who usually commute down the road were forced to stay at home or work from home.
Several people told the Otago Daily Times they had to cancel appointments and some said they had to change flight times from Queenstown Airport so they would not miss their flights.
Others came up with more inventive solutions, like using the four-wheel drive Hawksburn Rd route from Clyde to Bannockburn, and riding on Mr Dalton’s Lake Dunstan Explorer.
He said he ferried about 20 people to either end of the lake.
