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Police said the man in his 50s came off his bike on Coleshill Road in Atherstone, Warwickshire, at around 7.50am at the 23-mile mark.
The section of road that the incident happened on is a rural location with a steep downhill section with tight left and right bends, Warwickshire Police said.
The cyclist was airlifted to hospital for treatment but later died. His next of kin has been informed and specialist officers are supporting the family.
Velo Birmingham and Midlands 2019 cycle ride comes to Coventry
Sergeant Shaun Bridle, from Warwickshire Police, said: “While investigations are ongoing to establish the circumstances surrounding this tragic incident, we are keen to speak to anyone who may have witnessed it.
“We are particularly trying to identify any cyclists who may have seen anything or who may have GoPro camera footage from around the time of the incident to please get in touch.
Organisers of the Velo posted on social media saying they were working with the police to establish exactly what happened.
They said: “Congratulations to everyone who participated in Vélo Birmingham & Midlands 2019 – we hope you had an amazing time riding on closed roads around the Midlands.
“Weve been humbled by all the positive feedback we have received from you so far, but unfortunately its been a day of mixed emotions for us.
“We are saddened to report that a rider taking part in the event has passed away after being airlifted to hospital this morning.
“We are currently working closely with Warwickshire Police and authorities to establish the exact circumstances surrounding this incredibly sad development.
“The riders family have been informed and all our thoughts are with them at this difficult time.”
Anyone who may have witnessed the incident or has any information is asked to call Warwickshire Police on 101 quoting incident number 84 of May 12.
Velo Birmingham was criticised in 2017 by traders who said their businesses would be impacted by the road closures, then it did not take place last year and this year the course was changed to avoid Staffordshire and most of the Black Country. In 2017 nails and tacks were left on the route by saboteurs keen to disrupt the event.
The ride started in Birmingham before heading across the West Midlands, briefly entering the boundaries of Sandwell and Dudley in the Quinton area, before returning to the city.
In addition to the new 100-mile route, more than 1,000 riders took part in a new 42-mile version of the route, which took riders on a journey from Birmingham to Coventry.
One famous face taking part in this years event was ex-Wolves goalkeeper Carl Ikeme who took on the challenge for the hospital ward that has helped him battle back from leukaemia.
Ikeme, who announced he was in remission from leukaemia last year, took on the Velo to support ward 19 at the Heartlands Hospital – where he is being treated.
He took part alongside doctors and nurses who have treated him at the Bordesley Green East hospital.
Ikemes group group is hoping to raise £5,000 and has so far collected more than £3,000 on its GoFundMe page.
The team also intend to establish a DKMS harvesting unit – enabling the bone marrow harvesting of healthy donors and allowing transport of them across the world.
The cells would be taken to patients with haematological conditions and malignancies to help save their life.