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Firefighters spent about half an hour cutting a person out of a damaged car after the single-vehicle crash in Wansbeck St, Oamaru, about 7am on Saturday.
One of the car’s two occupants died at the scene and the other was flown to Dunedin Hospital on the Otago Regional Rescue Helicopter, emergency services said.
Police received a report about 6.30am of a vehicle driving dangerously on State Highway 1 south of Oamaru.
Shortly before 7am, a police unit spotted the vehicle in the Alma area and attempted to stop it, a police spokesman said.
The driver fled, and officers followed for a short time before abandoning the pursuit.
The vehicle was then located crashed at the intersection of Severn St and Wansbeck St in Oamaru.
"Our officers go out every day looking to make the community safer — this is the absolute last thing any officer wants to see happen on their shift," Otago Coastal area commander Inspector Marty Gray said.
"It is an absolutely tragic outcome.
"We would always advise that anyone who is signalled to stop by police should simply stop," Insp Gray said.
Police wanted to speak to anyone who witnessed the incident.
They were asked to call 105 and quote event number P041408802.
The officers involved in the incident would receive support in the coming days.
The Independent Police Conduct Authority would be notified of the incident.
A police spokeswoman said the police serious crash unit was also investigating.
A Fire and Emergency New Zealand spokesman said three fire crews, two from Oamaru and one from Weston, attended the crash, and cutting gear from an Oamaru appliance was used to extricate the person.
Firefighters then remained at the scene until 8.30am to assist police, he said.
St John was also at the scene.