The incident at Salt Ash, near Newcastle, saw three other teenage passengers taken to a nearby hospital with various injuries after a Ford Falcon sedan left Lemon Tree Passage Road and slammed into a tree on Friday night.
Police say the 17-year-old learner behind the wheel returned a positive roadside breath test.
He has been charged with negligent driving causing death, along with a drink-driving charge and driving as a learner without a supervisor.
Paramedics were called to the scene at 10.45pm on Friday, but the 16-year-old boy died en route to Newcastle's John Hunter Hospital.
The three other passengers, aged between 14 and 17, were taken to the same hospital with non life-threatening injuries.
Inspector Fatih Samsa urged drivers - particularly young road-users and learners - to take care on the roads, particularly with more traffic expected through a school holiday period.
"The family has received some of the worst news they can possibly receive … I would recommend that families talk to their children and young people in the family about safe driving, road safety, especially considering there's going to be more young people on the roads over the next period," he said.
"Even one death on our roads is one death too many."
The 17-year-old driver has been granted bail and will face court on August 19.
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