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The crash, involving three vehicles, happened about 7.25am at the intersection of Middleton Rd and State Highway 6A.
One male, trapped in his vehicle, was later taken by helicopter to Dunedin Hospital in critical condition while another person sustained minor injuries and was treated at Lakes District Hospital.
However, the incident caused massive delays for anyone trying to get from the Queenstown side of the crash to Arrowtown, Queenstown Airport, or beyond.
A stop/go was in place on the single-lane Edith Cavell Bridge to assist with traffic flow, but getting to the bridge took about an hour from Queenstown, and traffic was also backed up along Frankton Rd to the crash site.
Queenstown’s public bus service continued to run, but also experienced massive interruptions to its schedule.
Buses were planning to go along Frankton Rd to the crash site, ask passengers to walk past the scene and then get on to another bus to transfer them.
One passenger, however, said the bus was not moving either, so he opted to walk to the other side where a friend picked him up.
He saw at least 12 people walking towards Queenstown Airport with suitcases.
The international airport had earlier warned of delays for travellers via its social media channels.
Frankton Rd road eventually reopened about noon.
A police media spokeswoman said yesterday a serious crash investigation was continuing and was expected to take "some time".