The crash happened at Forest Way in Belrose about 6.10am on Tuesday.
The two cyclists, 47-year-old Nick Sky and 56-year-old Michael Collings, were taken to hospital with serious to critical injuries.
Police today said Sky had died while Collings remains in hospital.
The 24-year-old man allegedly behind the wheel of the car escaped from the crash uninjured and was taken to hospital for mandatory testing.
He was then taken to Manly Police Station, where he was charged with negligent driving (occasions grievous bodily harm) and cause bodily harm by misconduct in charge of motor vehicle.
He was granted conditional bail and will appear at Manly Local Court on July 24.
Anyone with information is urged to contact Crime Stoppers on 1800 333 000.
