The 31-year-old New Zealander was directly hit by Ford driver David Clark at the top of the Mount Panaorama circuit during the Fujitsu series race.
"Porter clipped the wall, and Dave had nowhere to go and hit the drivers door at about 200km/h as Porter had come to rest in a blind spot," a witness at the scene said.
Ambulance crews and paramedics worked with Porter at the scene before a helicopter flew both him and Clark to hospital.
Both drivers are reported to be in a critical condition, suffering from serious head, neck and chest injuries.
Confederation of Australian Motorsport president Colin Osborne said CAMS and V8 Supercars Australia have initiated support services for the families of both drivers.
Porter spun sideways near Reid Park on the climb up the mountain, stalled and was left stranded in the middle of the track in an area blinded to oncoming traffic.
Chris Alajajian put his car sideways and ripped the rear of both his and Porter's car.
Clark, who also put his Falcon sideways in an attempt to escape collision, then crashed directly into the driver's side door of Porter on his driver's side.
Police closed the circuit immediately after the accident, which happened on the 12th of the race's 14 laps.
Racing resumed after an hour delay with the Bathurst 1000 qualifying session.
Gemma Jones, a reporter for The Daily Telegraph who witnessed the accident on big screens at the event, said: "A third car had nowhere to go, lost control and slid sideways into one of the stricken cars.
"The impact was enormous due to their speeds. They were doing about 200km/h on that part of the course. It threw the cars in opposite directions.
"The first marshal to one of the cars appeared to check the driver's pulse. "He was unable to open the doors and motioned to other marshals nearby that he needed the 'jaws of life' to get the driver out."
Porter is currently based with the Gold Coast Msport Racing team.
He celebrated his 31st birthday only last Monday.
He is married with a one-year-old son.
Western Australia-born Clark, 26, lives in Adelaide and is married to Leah with three children - Kyle, Ashleigh and Reese.
He is making his debut in the Fujistu series this year.
Porter was scheduled to partner Dale Brede in Sunday's main race, diving for Team BOC Falcon.
The Bathurst weekend was already set to be a sombre affair with memorials and tributes planned for late racing great Peter Brock, who died in a crash during the Targa West rally almost a month ago to the day on September 8.
Brock won Bathurst a record nine times and was 61 when he lost control of his Daytona car and hit a tree at high speed.
V8 Supercars chairman Tony Cochrane said the accident reiterated the dangers of the sport.
"Motor sport is an inherently dangerous sport," Cochrane said.
"It's a terrible accident and our thoughts are with the families and we just hope for a good outcome.
"We just have to wait and see."
With FOXsports and AAP