One of the children, a 7-year-old boy, was in critical condition last night and was set to fly to Starship Hospital in Auckland. The mother of the children was discharged late last night, a Hawke's Bay District Health Board spokesman said.
The other two surviving victims - a 5-year-old and 9-year-old girl - were in a stable condition and spent the night in hospital.
One witness described hearing a loud bang and raced outside to investigate.
She saw two children lying prone on the ground as they were treated by ambulance staff.
A carseat had been thrown from a ute.
Another witness described the scene as "horrific".
"I could see from the condition of the vehicles that someone was seriously hurt or worse," she said.
"I have three kids myself - it's just terrible, that poor woman."
The sedan with one occupant and the ute carrying the mother and her children collided when the sedan crossed the centre line, police said.
A police spokesman said it was not known whether speed, alcohol or a medical event were factors in the crash.
Roadsafe Hawke's Bay regional manager Linda Anderson said it was tragic to hear of the fatal crash.
"Our message is simply to urge caution for drivers on Hawke's Bay roads," she said.
Ruahapia Rd was particularly dangerous because of its sharp bends, she said.
This is the first fatal car accident in Hawke's Bay since March 11 when a truck crashed about 400m south of the intersection of S 2 and Ellison St, Napier killing the driver.
It was the fourth fatal accident on Hawke's Bay roads in 2015.
