Four other people were taken to hospital by ambulance following the crash on the A90 at Rathen, Aberdeenshire, one mile north of the Cortes junction at around 12:45 yesterday.
The 73-year-old died in hospital following the collision between a silver VW Passat and a blue Peugeot 308.
The two-year-old was airlifted to Aberdeen Royal Infirmary by Air Ambulance.
Sergeant Rob Warnock from the Aberdeenshire and Moray Road Policing Unit is appealing for witnesses.
He said: "This is a tragic incident that has sadly resulted in a 73-year-old man losing his life.
"Investigations into the cause of the collision are at an early stage and I would urge anyone who witnessed the collision and hasn't spoken to police to do so. Additionally, anyone who may have seen the vehicles prior to the incident is asked to contact us."