Michael Armstrong, 35, of Ryhope, suffered serious injuries and died in hospital on Tuesday after he was a passenger in a car which crashed into a row of garden fences in Success Road, Philadelphia, on Saturday night.
Three other people - two men aged 20 and 21 and a 33-year-old woman - were arrested in connection with the incident and have been released with no further action to be taken.
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Michael, who lived in Ryhope and was dad to Rebecca, 17, was found shortly after the collision in nearby Ross Lea, in Shiney Row, a few minutes drive from the scene of the crash.
He was taken to the RVI but sadly died from his injuries on Tuesday.
A spokesman for Northumbria Police said yesterday: "An investigation is ongoing into the circumstances surrounding the collision and how Michael came to sustain his injuries.
"Officers have now arrested a 34-year-old man on suspicion of causing death by dangerous driving.
"The damaged fence in Kingston Mews, Philadelphia, following the collision.
"He remains in police custody and is assisting officers with their inquiries."
Police are eager for any witnesses to the collision who are yet to come forward and speak to officers to get in touch.
Anyone with information is asked to contact 101 quoting reference 1393 160219 or Crimestoppers anonymously on 0800 555 111.