The 18-year-old was driving a grey BMW sedan when it collided with the 36-year-old cyclist on Lady Denman Drive about 2.30pm on Wednesday.

The cyclist was heading towards the city, while the BMW was travelling westbound.

Acting Inspector Travis Mills said it appeared the BMW crossed onto the wrong side of the road and into the path of the cyclist "and as a result has collided with the cyclist".

"The information that we have from our investigation to date and information provided by witnesses is the cyclist was actually travelling lawfully upon the road," he said.

"Our investigations are in very early stages at this present point of time, what I can say however, it appears excessive speed was a contributing factor for this road fatality."

The cyclist was taken to Canberra Hospital in a critical condition but later died of the injuries. She is the second person to be killed on ACT roads this year.

The woman was a Uruguay national who had recently moved from Queensland to the ACT, police said.

She has been identified as Alicia Celaya Jauregui, 36, who had recently moved to Canberra from the Gold Coast.

The driver was alone in the BMW, which had been extensively damaged. He is assisting police with inquiries.

The collision comes amid an ongoing campaign for more cycle lanes from Pedal Power, which represents cyclists in the ACT.

While Lady Denman Drive doesn't have a dedicated cycle lane, Inspector Mills said there was a well-maintained cycle path running adjacent to the road.

He urged cyclists to opt for the safest travel options.

"I can only appeal for cyclists and vulnerable road users to use the safest option available to them, which is a defined cycle lane," he said.

"If this young lady was on the cycle lane, she wouldn't have lost her life but she was entitled to be where she was."

Members of the community who may have witnesses the incident or have dashcam footage are urged to contact Crime Stoppers on 1800 333 000 or via the Crime Stoppers ACT website.