French paper Midi Libre reports the crash happened a little after 4:30am today (local time) in the department of Herault along the highway near Béziers on the way to the city of Montpellier.
Their baby daughter has been taken to Montpellier hospital in a critical condition.
French police are yet to confirm the details surrounding the accident, but it seems as if Collins, who had been playing for French club Narbonne, was stopped on the highway as a result of a technical problem with his car. He'd lost control of his car and was on the right side of the road, but on an angle across it.
A bus, which was traveling from Portugal with 20 passengers on board, hit the car with full force, throwing the car a dozen metres against the central security barrier.
Collins and his partner, Alana Madill, were killed instantly.
Two of the passengers received moderate injuries.
When the emergency services first arrived, the two drivers of the bus had already taken the baby girl out of the remains of her parents' vehicle.
They handed her over to the firefighters who took her to hospital immediately.
The passengers on the bus are being given counselling.
The drivers of the bus are reported to be in shock and have been taken to hospital in Béziers.
The Hurricanes, his former Super Rugby team in New Zealand, said they would hold a minute's silence before their game with the Highlanders in Napier tonight, with the layers to wear black armbands as a mark of respect.
"We are shocked and saddened to hear the news of Jerry and his wife Alana passing," Hurricanes Chief Executive James Te Puni said in a statement.
"Obviously Jerry was a special part of both the Hurricanes and Wellington Lions over the years.
"He was an extraordinary leader and player, and our thoughts and prayers go out to his family at this time."
Jerry Collins' career
Collins, age 34, was born in Apia, Samoa. He played 48 tests for the All Blacks. He had three tests as captain.
Collins made his All Blacks debut in 2001, the same year he first played for the Wellington Hurricanes. Prior to that, he had been playing for Wellington in the NPC since 1999.
Collins retired from international rugby in 2008, and went on to play in Europe and Japan. Most recently he had signed with French club Narbonne, in January.
- Additional reporting Reuters