The Stawell man, 42, sustained multiple injuries, including severe head injuries.

He had been in a critical condition in the Royal Melbourne Hospital.

The cyclist's death is the first road fatality in the Wimmera this year.

On Monday, the Victorian road toll for 2012 was 28 deaths, an increase of 65 per cent on this time last year, when the road toll was 17.

Stawell police are continuing to investigate the cause of the collision and will prepare a report for the Coroner.

Acting Sergeant Shaun Allen of Northern Grampians Highway Patrol, based in Ararat, said police did not believe speed or alcohol were involved.

"The cyclist was wearing a helmet, so he was doing the right thing there," he said. "But he failed to stop at the stop sign, which was a major factor.

"Cyclists must obey the road rules as well. Most times, cyclists come off second best when they come into contact with cars."

The collision occurred about 4pm on January 9 at the intersection of Main and Frayne streets.

The area is near one of Stawell's main intersections, with several roads terminating at one point before a railway line.

A Stawell woman, 20, drove the car involved and was uninjured.

Her sedan was slightly damaged.