CANBERRA - NSW police stopped chasing a stolen car in Canberra's south moments before it ran a red light and hit a vehicle, killing two adults and a baby in the second car.

A 33-year-old Canberra man, a 29-year-old woman and her 4-month-old baby boy died instantly in the collision early yesterday, when their car was hit with such force that it slammed into a tree and split in two.

The 23-year-old driver of the stolen Mazda 626 died later at The Canberra Hospital, where his 18-year-old female passenger is in a critical condition.

The pursuit was initiated in Queanbeyan shortly after midnight after the stolen car sped past police conducting a traffic stop.

The chase continued across the border into Canberra but was called off when the stolen car ran a red light.

A short time later it ran another red light and struck the other car at the intersection of Canberra Ave and the Monaro Highway exit ramp at Narrabundah.

Crash scene investigators were at the scene yesterday, reconstructing the incident, which will be subject to investigation for the coroner.

Superintendent Mark Colbran from ACT Policing's Collision Investigation and Reconstruction Team could not confirm how fast the stolen car was travelling when the collision occurred, but said the impact had been "very big".

"I've seen worse impacts, but I haven't seen worse results."

NSW Police Commissioner Andrew Scipione said the young officers involved were traumatised by the "tragedy almost beyond description".

"No officer would ever want to go through this - these men were simply doing their job."

Colbran also defended the young officers. "Police don't start pursuits, other vehicles choose to engage in pursuits", he said.

"It's always a very difficult decision that police have to make on the spot, whether or not they should engage in the pursuit or not."