The crash happened shortly after 12.45am, when police spotted the car speeding down the Southern Motorway towards the city centre and gave chase, Sergeant Ed Baker, of Dunedin, said.
The patrol car attempted to catch up to the fleeing vehicle, following it off the motorway and on to Mornington Rd, before the car doubled back, reaching speeds of up to 90kmh while heading up Riselaw Rd in Corstorphine, he said.
The chase came to an abrupt end moments later, when the car reached the brow of a hill and became airborne, narrowly missing one car before slamming into two others parked on the side of the road, Sgt Baker said.
The force of the accident caused extensive damage to the cars and left wreckage strewn across the road as police, fire and ambulance crews worked at the scene.
The 20-year-old male driver, from Dunedin, received a serious leg injury and was trapped inside the wreckage until cut free by firefighters, Sgt Baker said.
He was taken to Dunedin Hospital by ambulance, where he was scheduled to undergo surgery late yesterday.
The three passengers in the car were a 20-year-old male and female of the same age, and a 30-year-old female, all from Dunedin.
All escaped serious injury, but two were taken to Dunedin Hospital for medical checks.
Sgt Baker said the passengers had been "unco-operative" at the scene following the accident, and an investigation was continuing.
Charges would follow and were likely to include failing to stop, dangerous or reckless driving and, possibly, driving while disqualified.
The driver was known to police.
A separate investigation into the handling of the pursuit by police would be carried out by the Independent Police Conduct Authority.
