Toronto police said the 17-year-old victim was walking along a sidewalk on Attwell Drive when she was hit by the car, which "mounted the curb" while heading south.
The incident happened on Saturday evening. Police were called to the scene at 6:41 p.m.
Sgt. Graeme Philipson said the victim was taken to hospital with life-threatening injuries, where she later died.
It is not clear what caused the woman to lose control of the vehicle, which also knocked over a parking sign and came to rest near a pair of concrete steps.
Philipson confirmed that the woman behind the wheel and the victim were sisters.
"This is just a very tragic situation," Philipson told CBC News by phone.
Witness describes scene
Melinda Jefferey was at a nearby church when the collision occurred.
Emergency responders were already on the scene when Jefferey got outside.
She said she ended up spotting the woman who had been behind the wheel of the car.
"She was really crying and distraught," Jefferey told CBC News.
Jefferey said it wasn’t immediately apparent that she was involved until she "started screaming" about what happened.
"She just kept saying, 'It's an accident. Is she okay? Please help her, please help her,'" Jefferey said.
Philipson said police are now looking for witnesses to the collision.Suggest a correction