At approximately 12:15 p.m., emergency officials responded to the accident, which took place at the intersection of U.S. 40 and County Road 425 West.
According to Clay County Sheriff's Department Dep. John Tilley, one of the vehicles was driving south on CR 425 W., while the other was heading west on U.S. 40.
According to Tilley, the driver of the westbound vehicle, an unidentified man, the driver the southbound vehicle, an unidentified woman, approached the intersection but failed to make a complete stop and "rolled" through the intersection, forcing the collision.
The female driver had to be extricated from her vehicle and was then transported via AirEvac to Wishard Hospital, Indianapolis.
Tilley said the woman was "coherent" at the scene.
He added the other driver was checked and released at the scene.
Members of the Posey Township Volunteer Fire Department were on scene as well, routing traffic from U.S. 40 to State Road 340 and to clean up debris.
Traffic flow on U.S. 40 was back to normal at approximately 1 p.m.
Other agencies responding included Clay County Search and Rescue and TransCare.
This story will be updated as more information is provided.