A sixth victim suffered serious injuries in what appeared to be a head-on collision.
The Otago Daily Times understands there were children among the victims.
Police said officers were called to the scene on State Highway 1 between the intersections with Titri and Bungards Rds about 12.15pm.
Hato Hone St John said three ambulances and two helicopters were sent to the scene.
A St John spokesman said four people were taken to Dunedin Hospital, three in a critical condition and one serious.
Two were taken by helicopter and the other two by ambulance, he said.
A witness who asked not to be named said she felt "traumatised driving past" about 12.30pm before emergency services arrived.
"I didn’t see it happen, but it looked horrific," she said.
"I don’t know how it would have happened as it was right on the brow of the hill, so no-one should have been considering passing."
A resident who lives on the road said they "had never lived somewhere with so many fatalities" in front of their house.
They said since they had been living there, there had been countless accidents.
"It feels as through the area is cursed - it shouldn’t be a difficult piece of road to drive."
The resident said the signs on either side of the town that read "no doctor, no hospital, one cemetery" were horribly fitting for the stretch of road.
An aerial photo taken of the crash showed a ute in a ditch beside the southbound lane, while another car was under a tarpaulin facing the ute in the same lane.
Helicopters Otago pilot and chief executive Graeme Gale said the crash was "an absolute tragedy".
"I don’t know what caused it or how it happened, but there were two cars involved ... and with extremely sick patients."
A Fire and Emergency New Zealand spokesman said three appliances, from Milton, Waihola and Balclutha, responded.
A reporter at the scene said traffic was being diverted along Titri Rd.
Last night police confirmed the deaths and said inquiries into the circumstances of the crash were ongoing.
They have asked anyone who witnessed the crash, assisted at the scene, or who may information that could help to contact police.
- Police - 105, case reference number: 230828/5647
