One of the drivers, a 29-year-old Chilean man who was driving with four passengers, is under police guard in hospital with non life-threatening injuries.
His passengers included a Chilean man who died at the scene and a Chilean man who died in hospital.
One of those men has been identified as Alejandro Morales, who had been working in Australia for less than two months, according to Nine News.
A 33-year-old woman, also from Chile, was taken by helicopter to The Alfred in a critical condition.
Another passenger, a 33-year-old man from Argentina, has non-life threatening injuries.
The driver of the second car, a 47-year-old Rye man, was taken to hospital with non-life threatening injuries.
Friends remembered Mr Morales as a fun-loving traveller. Flowers were left at the scene on Tuesday.
Detectives from the Major Collision Investigation Unit are investigating. The exact circumstances of the crash have not yet been determined.
A man died in a separate crash on Tuesday afternoon.
Police say he was driving an SUV and tried to overtake two cars on Baxter-Tooradin Road in Pearcedale, 50 kilometres south-east of Melbourne.
He crashed head-on with a semi-trailer about 12.20pm and died at the scene.
The man has not yet been identified.
The truck driver was taken to hospital with non-life threatening injuries.
Baxter-Tooradin Road remained closed in both directions early on Tuesday evening.
Anyone with information should contact Crime Stoppers on 1800 333 000 or submit a confidential report at www.crimestoppersvic.com.au.
Rachel is a breaking news reporter for The Age.