A 70-year-old man was driving the taxi downhill along Chun Wah Road and as he approached a sitting-out area on Choi Ha Road, he lost control of the vehicle which veered onto the pavement and hit both women.
They were rushed to hospital, where one of them was later pronounced dead.
The taxi driver and his two passengers also sustained injuries and were taken to hospital for treatment.
Police have since arrested the driver on suspicion of dangerous driving causing death, and he is being held for further questioning.
According to the Hospital Authority, all four injured individuals remain hospitalised.
The surviving pedestrian is listed in critical condition, the two taxi passengers are in serious condition and the taxi driver is in stable condition.
In a statement, Caritas Hong Kong confirmed that both pedestrians worked as dental surgery assistants at its clinic in Ngau Tau Kok.
The organisation expressed deep sorrow over the tragedy, adding that staff and social workers were deployed to provide support to the injured and the family of the deceased.
