It is not known whether his bionic arm had any role in causing the accident.
Christian Kandlbauer, 22, was found in the wreckage of his specially-adapted Subaru on Tuesday.
Late on Thursday he was pronounced brain-dead in intensive care at the Graz hospital and his life support was switched off.
Mr Kandlbauer lost both of his arms four years ago, after being shocked by 20,000 volts.
He was fitted with a mind-controlled robotic arm by the medical technology company Otto Bock Healthcare, which said it was the first project of its kind in Europe.
Using both his left and right arm - which was a normal prosthetic limb - he was able to pass his driving test in a specially converted car.
On Tuesday he was found by a lorry driver who came across his burning car on a road near Bad Waltersdorf in south-east Austria.
The driver managed to put out the flames, but it needed firefighters to extract Mr Kandlbauer from the mangled wreckage.
He had been interviewed by the BBC about his revolutionary limb earlier this year.
"I feel very happy," he said at the time. "It is like my earlier arm - I feel that my arm is a part of my body."
He had returned to work as a warehouse clerk at the garage that once employed him as a mechanic.
He said he was grateful that he had the freedom to get on with his life.
A man thought to be the first to drive using a mind-controlled robotic arm has died in an Austrian hospital after a serious car crash.