Authorities extracted the five bodies from the vehicles just after 10am, while members from the SES have now cleared the crash scene of debris.
The fatal crash occurred just after 1am in Lara, about 15km north-east of Geelong.
A car carrying six people - one passenger over its capacity - is believed to have been filled with people in their 20s traveling from Geelong to Melbourne.
The Geelong-bound passage near the Lara freeway exit has been reopened and cars and flowing opposite the site.
Two males and two females in the car died on impact; while a male passenger remains fighting for his life this morning at The Alfred hospital.
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Investigators believe the crash occurred after a car, travelling on the wrong side of the Princes Fwy near Avalon Rd, collided with a car travelling Melbourne-bound just after 1am.
The male driver of the vehicle managed to escape without life-threatening injuries and will assist police with their probe.
The sole female driver of the BMW is believed to be in her 30s.
Assistant Commissioner Jack Blayney said it could be weeks before investigators could establish whether drugs or alcohol had been a contributor the crash.
He said witnesses had informed Lara detectives of a vehicle speeding in excess along the wrong side of the freeway at Werribee South and officers had pursued the matter as a "priority".
Ten dead in motorway carnage
He said a number of vehicles had been driving along the road at the time of the collision and had witnessed the tragedy unfold in front of them.
The site of the smash - which is Melbourne-bound beside the Lara exit ramp - reflects a chilling scene this morning.
A mangled BMW is sprawled across the left embankment, where it's easily linked to the second car by a bridge of debris scattered across the gravel.
It is understood a female was the sole occupant of the car which was reportedly travelling the wrong way.
Members from the Disaster Victim Identification crew are also at the scene assisting investigators.
Assistant Commissioner Jack Blayney said the deceased bodies needed to be extracted from the vehicles before detectives could probe who was wearing seat belts at the time of impact in the overloaded car.
"Clearly there were more people in the car (Subaru) then should have been. Whether or not that's a large contributing factor to the scale of the disaster, I don't know," he said.
"The speed at which was involved here ... anyone in either car would have been very lucky to survive.
"We don't understand why the car (BMW) was being driven in this manner.
"It's just a very, very tragic sad circumstance."
He said investigators would probe whether the car was being deliberately driven with the intent to crash as part of the probe.
"That will become more apparent over the days ahead as we continue to investigate the matter," he said.
"This is a stark reminder of how these things can turn so terribly wrong, in a simple thing like driving down the freeway."
Assistant Commissioner Blayney said: "We've got members of the community who saw this vehicle on the wrong side of the road as far back as Werribee South."
The vehicle was believed to have been traveling along the wrong side of the freeway for up to 10 minutes before the collision.
"This is what we deem a priority incident and police were responding; unfortunately they couldn't get here before he collision. The members obviously were first at the scene. They've been through a lot of trauma tonight," he said.
"This has a huge impact on people; particularly members of the community who were driving past and saw this unfold before their very eyes.
(And) at some stage this morning people will be getting a knock on their door informing them their loved ones have died."
Anyone with information or anyone who may have witnessed the vehicle on the Freeway prior to the collision is urged to
contact Crime Stoppers on 1800 333 000 or visit www.crimestoppers.com.au.