A NSW Police spokesman said the head-on crash near the corner of Kelly Road happened about 3pm. Only minor injuries were reported.
The ACT Emergency Services Agency said Canberra firefighters and intensive care paramedics had been called to help.
"Crews found one car well alight which had ignited a small grass fire on the Monaro Highway. ACT Ambulance and NSW Ambulance have transported two patients with minor injuries to the Canberra Hospital in a stable condition,"it said in a statement.
The highway was closed for about 40 minutes after the crash but it reopened shortly before 5pm when NSW Police were managing traffic flow. Emergency services were still at the scene as of 6pm.