Police initially said the collision at the intersection of the Murray Valley Highway and Labuan Road at Strathmerton on Thursday claimed three lives but the death toll was increased to five on Friday.
The crash about 2.30pm involved two cars and a truck.
Police had intercepted a white Mercedes sedan at 1.45pm and gave the 29-year-old man driving a speeding ticket for going 118km/h in an 100km/h zone in Strathmerton.
A short time later, the Mercedes collided with a Nissan Navara, which spun out and hit a fully loaded b-double milk tanker on the Murray Valley Highway.
All five people in the Navara died instantly.
Two other people involved in the crash, the 29-year-old Mercedes driver and his 29-year-old female passenger, have since been released from hospital after they were taken there with minor injuries on Thursday.
The 29-year-old is in police custody and being interviewed.
Victoria Police assistant commissioner Glenn Weir said he had watched footage of the incident.
"It's horrific. It is catastrophic, the damage that has been caused as a result of a simple collision that has ended with the loss of five lives," he told reporters on Friday.
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