Nigerian runner Hyginus Anugo was fatally injured in a collision with a car near the Olympic precinct.
Anugo, who was 22, was due to run in the 400m and was also a reserve for the relay team.
It was first thought that a Nigerian Olympic official was the victim, but it was later confirmed Anugo had been killed while crossing a road.
Nigerian Athletics Federation president Oluyomi Adeyemi-Wilson paid tribute to Anugo.
"The news about Anugo's death was broken to the federation this afternoon by our secretary, who called from the Nigerian Olympic camp in Sydney," he said.
"It is very sad indeed. This has never happened in the history of this country."
Anugo was considered a promising young 200m and 400m runner and had participated in the World Junior Championships in 1996 in Sydney.
"He was a very quiet person, an easy-going person," Nigerian coach Brown Ebewele said.
"When the news got to us, everybody was shocked."
