Collins, 34, who was capped 48 times by the All Blacks, was near the town of Beziers when his car came to an unexplained stop on the A9 highway, before being hit by the bus.
The couple were travelling with their two-month-old daughter, who survived the accident but is in a serious condition, the officials said. The driver of the bus, which was carrying Portuguese tourists, was lightly injured.
New Zealand media named Collins' wife as Alana Madill and their child as Ayla.
(Jerry Collins. Photo: AFP)
Collins made his All Blacks debut against Argentina in 2001 but his international career ended at just 26 when they lost to France in the quarter-finals of the 2007 World Cup in Cardiff.
The All Blacks official website describes the flanker as one of New Zealand's most feared enforcers.
"Collins was one of the toughest and most uncompromising forwards to ever play for the All Blacks and his ferocious tackling and intimidating presence made him feared by every opponent," it said.
He captained New Zealand on three occasions, including a Test against Argentina, and went on to play in France, Wales and Japan after leaving his homeland. His was currently playing with second tier French club RC Narbonne.
Past and present All Blacks responded with shock and disbelief on social media to the demise of the player known as JC.
"Struggling to think that it's happened.. dont want to believe it!!," World Cup winner Piri Weepu tweeted. "Had the privilege and honour of bleeding with him on the weekends on the field. Words can't express how sad I am brother. RIP big brother JC!"
Veteran Keven Mealamu simply said: "Don't want to believe it" while All Blacks winger Cory Jane tweeted "RIP hitman".
The All Blacks official twitter account said: "We are shocked and saddened by reports about the accident involving Jerry" while his former Super Rugby team Wellington Hurricanes expressed similar sentiments.
Officials announced a minute's silence would be held before the Hurricanes' match against the Otago Highlanders in Napier later Friday.
"We plan to go out there tonight and honour the hell out of Hurricane No. 82. RIP Jerry, you will always be a huge part of the Canes legacy," the Hurricanes tweeted.
Former Wallabies skipper David Pocock also expressed his sympathies.