The tragic accident happened four minutes into the race when Repsol Honda rider Simoncelli came off at Turn 11 of the Sepang circuit.
His Honda bike swerved across the track and he was hit by fellow competitors Colin Edwards and Valentino Rossi.
Simoncelli, 24, had his helmet knocked off in the crash and he lay motionless on the track.
American Edwards also fell but escaped serious injury, while former multi-world champion Rossi was able to return to the pits on his Ducati.
The race was immediately red-flagged while Simoncelli received treatment and was later abandoned.
Simoncelli was in fourth place when the accident occurred on lap two.
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