The emergency services rushed to the scene on the A5 at Nesscliffe at 3.08am on Monday.
A spokesman for West Mercia Police said: "At around 3.15am on Monday officers received a report of a two-vehicle collision on A5 Holyhead Road involving a car and a lorry.
"We attended with West Midlands Ambulance Service and sadly the driver of the car, a man from Shrewsbury, died."
A 21-year-old man was arrested at the scene on suspicion of death by dangerous driving. Police confirmed on Tuesday morning that he had been released on bail.
Police later said the man who died was the 23-year-old driver of a Vauxhall Astra.
Anyone who witnessed the collision or has any information or dash-cam footage which may help with the investigation is asked to contact Sgt Alexander Saxton on 07970 864475 or Alexander.firstname.lastname@example.org quoting incident 42i of January 23.
A spokesman for West Midlands Ambulance Service said: "One ambulance and a paramedic officer attended to a road traffic collision involving a car and a lorry at 3.08am on the A5, Nesscliffe in Shrewsbury.
"Ambulance staff found the driver of the car in a critical condition. Unfortunately, it quickly became apparent that nothing could be done to save him and he was confirmed deceased.
"The driver of the lorry was assessed and was uninjured. He received self-care advice before being discharged at the scene.”
The A5 was closed in both directions between the A458 and B4396, near Shrewsbury, following the serious collision.
Emergency services including West Mercia Police were in attendance. National Highways have deployed resources to assist with traffic management.
A spokesman for National Highways said collision investigation will be taking place at scene and the road was expected to remain closed for several hours.
Long diversions were put in place with the A5 being closed between the A458 and B4396 for most of the day.
A fire service statement read: "At 03.11 on Monday, 23 January, 2023, SFRS Fire Control received a call reporting that a road traffic collision had taken place in Shrewsbury.
"Three fire appliances including the Rescue Tender were mobilised from Baschurch, Shrewsbury and Wellington. An Operations officer was in attendance.
"Also at the scene of the incident were: the land ambulance service and the police," the statement continued.
"One HGV and one saloon vehicle involved in road traffic collision".
The road remained closed for around 16 hours, with National Highways announcing it had reopened shortly before 7.15pm.