Organisers of Targa Tasmania have released the name of the driver who died on the first competitive stage of the six-day rally.

New South Wales driver John Mansell was killed when his Porsche ran off the road at Exton.

Police say the 71-year-old lost control and the car hit a tree on Porters Bridge Road just after 9.00am.

His co-driver Tristan Catford, 26, was seriously injured but is in a stable condition.

Other competitors say they were oblivious to the death until hours later.

But they say the decision to continue the rally after the crash was in keeping with the spirit of motor sport.

Competitor Warren Bossie says road conditions were generally good.

"There was a bit of moisture in the road in the early stages before the sun had really come up."

The rally is due to finish in Hobart on Sunday.

Police say the driver in his 70s was from New South Wales. ( ABC News: Jonathon Gul )

The Confederation of Australian Motorsport says it is deeply saddened by the death.

It is the second death in Targa Tasmania since the six-day rally began in 1992.

Melbourne navigator Ian Johnson died in 1996 during the Riana stage in the state's north-west.

There have been several deaths at Targa events interstate, including racing champion Peter Brock who died near Perth in 2006.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 2 minutes 27 seconds 2 m 27 s Acting Inspector Chris Parr talks to reporters at the scene. Download 1.1 MB

Tasmanian Premier Lara Giddings has expressed condolences to the driver's family.

She says there are risks associated with all motor sport events.

"What you need to do is to minimise those risks," she said.

"Obviously today we've had a tragic accident occur as part of that rally and I'm sure the organisers will be looking very closely at what happened, how it happened and how you can try and mitigate that risk into the future."

A report is being prepared for the Coroner.