The 36-year-old man died at the scene of the collision on the A489 bypass on Sunday.
The driver of the second vehicle was taken to hospital for treatment for minor injuries.
One of the vehicles involved in the tragedy was a lorry carrying sheep, with a number of the animals killed or injured.
Dyfed Powys police say the crash happened at about 6.30pm.
Both lanes of the bypass between the Llanidoes Road and Dolfor Road roundabouts were closed as the emergency services worked at the scene.
Police say the road remained closed today while investigations continued.
Newtown Police appealed for any motorists who witnessed the accident to call them on 101.
A police spokesman said the family of the man who died had been informed.