A 31-year-old man was expected to face "significant and substantial charges" over the fatal crash, Assistant Commissioner Brett McFadden said.
A critical incident investigation is under way following the alleged crime spree, which began with a car theft and assault about 10.20am on Saturday.
Police allege a 25-year-old man was punched in the face before his car was stolen by the offender at a petrol station in South Hurstville.
A police chase was sparked after the driver allegedly failed to stop when it was seen by highway patrol officers at Beverly Hills.
Assisted by the NSW Police air wing, police continued their pursuit along the M5 motorway before calling it off in Bankstown area about 10.30am.
"I've watched the footage from our aviation support aircraft, and there were no police vehicles around this driver," Mr McFadden said.
"He was driving in what I could describe as one of the most reckless and dangerous demonstrations of driving I've seen in a long time.
"He was overtaking vehicles at speed in the breakdown lanes, he was crossing over to the incorrect side of the road. All of which without police vehicles around him."
A police helicopter continued to track the car for at least 40 minutes before it crashed into an Alfa Romeo sedan on the Old Hume Highway in Camden South about 11.10am.
"The offending driver has gone up the inside of those vehicles at speed, crossed into the intersection and impacted with another vehicle that had the lawful opportunity to turn right," Mr McFadden said.
A 60-year-old woman driving the Alfa Romeo and an 84-year-old woman passenger died at the scene.
The pair are part of an extended family.
"This is a tragic set of circumstances. This is absolutely devastating for that family," Mr McFadden said.
The offender allegedly ran from the crash and was arrested at gunpoint nearby.
He has undergone mandatory testing at Campbelltown Hospital before being taken to Campbelltown Police Station.
"The 31-year-old male that is in custody is well known to us, and he is directly responsible for the death of those two women," Mr McFadden said.
A critical incident team will lead investigations into the circumstances surrounding the crash.
The investigation will be reviewed by the Professional Standards Command and overseen by the Law Enforcement Conduct Commission.