Officers found the man inside a car on Murphy Street in Preston about 4am after they received reports a car had crashed through a fence and into a front yard.
The man was seen “behaving erratically” inside the car, before he got out of the car and confronted the officers, according to Victoria Police.
The officers tried to restrain the man before he appeared to become unresponsive, police have said.
The officers immediately called for medical assistance and performed CPR on the man but he could not be revived.
Police have advised that Homicide Squad detectives will investigate the incident with oversight from Professional Standards Command, as is the standard practice when a person dies in police custody.
Anyone with information about the incident has been urged to contact police.