An 18-day-old premature baby has died on the same day her parents were buried after dying in a car crash.

Justin Schollbach and Leah James died last Tuesday after crashing their ute on Captain Cook Drive at Kurnell, an area near the southern head of Botany Bay in New South Wales.

The couple were driving home from visiting their baby Lucy, who was born 12 weeks premature.

The couple's ute crashed into a pole and split in two, killing them instantly.

Weighing only 1.3kg, Lucy was living in a humidicrib in the neonatal ward at the Royal Hospital for Women in the eastern Sydney suburb of Randwick, where her parents had been visiting her twice a day.

A statement from the hospital says Lucy died from complications associated with her premature birth.

The hospital's clinical director, Dr George Bearham, says she died shortly before 4am (AEST).

"Despite the efforts of doctors and nurses, Lucy passed away from complications associated with her premature birth," he said in a statement.

"This is a very sad time for Lucy's family and all of those who cared for her here."

Family friend India Bent, who grew up with Mr Schollbach, says it has been a tough day for the family, who are doing their best to deal with the grief.

"She passed away this morning, wanted to be with her mum and dad I think," Ms Bent said.

"It's been a very hard day ... the funeral was today for both the parents.

"[Lucy] was Justin's first child, a long-awaited first child."

Ms James had five other children, aged between six and 15, who are struggling to cope with losing their mum.

Doctors had expected Lucy to stay in hospital until November.

Ms Bent says a funeral for Lucy will be arranged at some point.

"We're just trying to deal with this today and trying to deal with the next five minutes," she said.

- ABC/AAP