The Major Crash Squad is investigating the death of a driver at a race event in the state's south.

The 26-year-old man was competing at 'Racewars' at Albany Airport on Sunday afternoon when his Ford Mustang, which had reached speeds of 230km/h in the past, failed to stop at the end of a runway and continued on, smashing through a fence before bursting into flames in a paddock.

The man was critically injured and was flown to Royal Perth Hospital but died shortly later.

Police are investigating the crash, which occurred shortly after another accident forced a driver to be taken to Albany Hospital.

'Racewars' is marketed as the only event in Australia where drivers can test their cars in a 1km sprint.