A 21-year-old driver involved in a police pursuit in Melbourne has died after colliding with a taxi at Pascoe Vale.

Victoria Police said officers spotted a station wagon with false plates on Sydney Road about 8:30pm on Friday and began the pursuit.

Commissioner Shane Patton said the chase lasted for several minutes through back streets before the station wagon crashed on Sussex street.

"It's gone to overtake a taxi that was turning right... and it's collided with the taxi and the car that's being pursued has subsequently hit a pole," Commissioner Patton said.

Emergency services were called but the man died at the scene.

The 54-year-old male taxi driver suffered minor injuries.

Commissioner Patton said the driver exceeded the speed limit at times but insisted the pursuit was not conducted at high speed.

"I'm advised that it wasn't what you'd call a high-end pursuit, but the speeds have varied," he said.

"Certainly they've been over the speed limit, but they have also gone down under the speed limit through out the duration of it," he said.

He said the incident would be investigated by the Police Professional Standards Command.

"They're oversighting the investigation that's being conducted by the major collision investigation unit," he said.

"It's obviously going to be a tragedy for the family and friends of the deceased, and it's quite traumatic for the police members involved."