Inspector Mark Harrison said police attempted to pull the driver over at 9.14am, but the car fled police and hit the cyclist "seconds later".
The cyclist was taken to hospital with "non life-threatening" injuries.
"The driver continued to flee however the pursuit was immediately abandoned and officers stayed with the injured cyclist as other police patrols went into search mode to see if the vehicle could be located," Mr Harrison said.
"We don't know where he went after that, we completely lost sight of him for quite some time."
Police did not know how the driver ended up back in Wanganui when they were last seen heading out of town, but that was part of the investigation, Mr Harrison told the Chronicle.
The driver was spotted a short time later on Rapanui Road by an officer and police began setting up road spikes.
He said there were "lots of police staff out there in their vehicles" which meant they were in the right place to set up the spikes.
The driver smashed into a culvert while trying to avoid one set of spikes. The car then accelerated away for another 2km to where police had laid out more spikes.
"In a further attempt to avoid the spikes the vehicle has driven into a large truck which was stationary on Tayforth Road," Mr Harrison said.
"The car caught fire, and the driver died at the scene. The driver of the truck is shaken but is not injured."
Mr Harrison said the truck driver had been driving along Tayforth Road when he saw the police laying down spikes, so pulled over to avoid them, and "watched it tragically unfold, poor man".
Mr Harrison didn't know if there had been time for police to warn the truck driver to move away from the spikes, and spokes about "how quickly these things unfold".
"Just in the blink of an eye, life can change forever."
A number of specialist police staff including CIB were conducting a scene examination.
An investigation into the circumstances of the incident was launched, and a routine investigation into the pursuit will also be carried out.
The Independent Police Conduct Authority was informed.
Mr Harrison said police would be in a position to release the driver's name tomorrow.
The reason why the driver was being pulled over in the first place was "part of the investigation".
A Tayforth Road resident was at home when he saw the speeding car drive past, "straddling the white line, almost on the wrong side of the road".
The witness, who did not want to be named, said the car's rear bumper was hanging off, "flapping in the breeze".
He did not see the crash, but said he "heard the boom". He did not go out to investigate.
"Four police cars passed shortly after, I figured they had a handle on it," he said.
Great North Road resident Lachie Cromar was in his house at the time of the first accident when he heard a crash and came out to see the injured cyclist lying on the street.
"He was just lying in the gutter," Mr Cromar said.
The cyclist, who is in his early 30s, was in a stable condition in Whanganui Hospital yesterday morning, and was discharged later in the day.
Several police cars and an ambulance attended the scene and the section of road by the shops was blocked off for traffic heading towards town.
