An experienced skydiver has died after colliding in mid-air with another jumper southwest of Sydney.

Paramedics were called to Wilton just before 10am (AEDT) on Saturday but could not revive the man, who was in his early 30s.

Police believe he was knocked unconscious in the collision, before crashing into an earth-moving machine on the ground.

Investigators are trying to determine whether he suffered his fatal injuries in the mid-air collision or when he hit the parked earth mover outside the designated landing zone.

The other skydiver, a 39-year-old man, suffered minor injuries in the collision and was taken to Liverpool Hospital in a stable condition.

Sydney Skydivers director and chief instructor Phil Onis told AAP the two were involved in a jump out of a Cessna Caravan aircraft by 17 skydivers wearing squirrel-like gliding suits.

He said both skydivers were experienced and the deceased man, who was from Sydney, had made about 250 jumps.

Mr Onis said the chute of the deceased skydiver automatically opened after the collision but if he had been knocked unconscious he would not have been able to control his descent.

"The deceased may have died in free fall or when he hit the ground, we're not too sure.

"They're free-falling very fast and he hit the other fellow pretty hard," Mr Onis said.

"Skydiving is just like any other outdoor adventure activity.

"It's dangerous just like surfing or rock climbing or skiing, and everyone understands the dangers."

Police will prepare a report for the coroner and the Australian Parachute Federation will also conduct an investigation.