A woman has died and another is seriously injured after an alleged hit-run collision in Newcastle.

NSW Police have declared a critical incident investigation as they search for a driver following the crash in North Lambton just after 2.40am.

Officers allegedly saw a Holden sedan driving dangerously on Newcastle Road and decided not to pursue it out of safety concerns before the collision occurred on the same road shortly afterwards, according to police.

The Holden sedan collided with a Hyundai sedan further along Newcastle Road.

The passenger of the Hyundai, a woman believed to be in aged her 50s, died at the scene.

She is yet to be formally identified.

The driver, a 28-year-old woman, was taken to John Hunter Hospital in a serious condition.

The driver of the Holden allegedly fled the scene before police arrived.

Two backseat passengers in the Holden – girls aged 15 and 17 – were treated by paramedics before being taken to John Hunter Hospital under police guard.

A crime scene was established and a critical incident team from Hunter Valley Police District will investigate the circumstances surrounding the incident.

The investigation will be reviewed by the Professional Standards Command and oversighted by the Law Enforcement Conduct Commission (LECC).

Anyone with information, CCTV and or dashcam footage about this incident is urged to contact Crime Stoppers: 1800 333 000 or Information is managed on a confidential basis.
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