Phillipa Jane Manning (43) and her daughter, Rebecca Katherine Coulter (6), both of Waihola, died when their car collided with a truck and trailer and erupted in flames.
Emergency services were called to State Highway 1, 4km south of Milton, near the intersection of State Highway 8, at 9.35pm.
A passing motorist who witnessed the accident, rescued a child (2) from the burning car. Police have been unable to contact the motorist.
The child was airlifted to Dunedin Hospital in a serious condition.
Diversions were put in place, and the road was reopened at 4am this morning.
Commercial Vehicle Investigation Unit, and serious crash investigators, both of Dunedin, and the Balclutha Police were investigating the accident, with the cause yet to be determined.