Two are being airlifted to Dunedin Hospital– one is in a serious condition, and one is in a critical condition.
The third is being transported by road in a minor condition.
The Otago Daily Time is reporting a local business owner near the crash site said she heard a big bang and then a woman screaming.
Mini drivers were participating in the rally and one had crashed into a local person driving a 4WD, she said.
Fire and Emergency New Zealand (Fenz) shift manager Riwai Grace earlier said crews were working to free one person.
Motorists are asked to follow the signage in the area, a spokesperson said.