The deceased were taxi driver Salah Bin Ibno, 64, and his three passengers - Kee Kwok Edein, 63, from Hong Kong, Jaafar Kasim, 40, and Pedro Jr Pajimola, 36, a Filipino.
Sandakan Police Chief ACP Rowell Marong said Salah, Kee and Jaafar died at the scene, while Pedro died while being treated at Duchess of Kent Hospital.
The accident occurred at 5.30pm when the 4WD travelling from Sandakan town skidded, entered the opposite lane and collided into the taxi.
The 24-year-old male driver of the 4WD and two women passengers, aged 25 and 32 years, were seriously injured and reported to be in stable condition.
Rowell said investigation found that the crash occurred at a straight stretch with double lines as it is going uphill from the direction of Sandakan town.
He said the case is being investigated under Section 41(1) of the Road Transportation Act 1987, and urged those with information to contact his investigating officer at 089-242 222/212 222 (ext. 254) to facilitate investigations.
A total of eight rescue personnel led by Sandakan Fire and Rescue Department Chief, Anddre Andrew, and Operations Chief, Johny Yap, rushed to the scene after receiving a call and arrived at about 5.43pm.