The man was a passenger in a car which collided with a van at the intersection of Ventnor and Red Rocks roads in Cowes about 6.45pm.
A woman from the same vehicle was airlifted to a hospital in Melbourne.
Two people from the van, believed to be aged in their 20s, escaped serious injury.
Detective Acting Sergeant Tony Gentile, of the Major Collision Investigation Unit said initial investigations suggest the elderly driver failed to give way to the van.
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He said police would continue to investigate the circumstances surrounding the collision.
“People need to drive to the conditions,” Acting Sergeant Gentile said.
“No one wants to give death messages on Christmas Day.”