The crash happened shortly after 4 p.m. near the intersection of Faulkland and Centerville roads.
Police said two boys, a 10-year-old and a 12-year-old, were walking on the sidewalk when they were hit by the car.
The 10-year-old died from his injuries at the hospital.
The 12-year-old was rushed to Nemours Children's Hospital, where he was treated and released.
Marbrook Elementary School is just blocks away from the intersection where the boys were hit. It's a part of the Red Clay Consolidated School District, where both boys were students, Action News learned.
According to police, the teen driver was traveling westbound on Faulkland Road, approaching Centerville Road, when the vehicle crossed the double yellow line into the opposite lane and struck the children.
The 17-year-old was taken to Christiana Hospital for his injuries and was later released.
Video from the Action Cam shows paramedics helping the victims at the scene.
A red Hyundai with front-end damage was stopped next to a house with damage to the corner.
One witness, who did not want to be identified, told Action News what he saw during this incident.
"Saw from when the car came across the street and went over the concrete, and I saw him hit the one kid and the kid went flying into the yard," the neighbor said.
Neighbors say this is a dangerous intersection with a lot of accidents.
"They drive very fast all of the time, going through this red light," said Michelle Beck of Wilmington.
"This is a bad intersection, Centerville and Faulkner roads, there's cars flying through the lights all the time," added Leslie White of New Castle.
"We do come here frequently for accidents but as for what led up to this, we're still in the early stages," said Sgt. Andrea Botterbusch, with New Castle County Police.
Witnesses say after the 17-year-old driver hit the two boys, the car didn't come to a stop until after it crashed into a house -- destroying a railing and leaving damage to the home.
"He had to be doing at least 60, if not faster," said a witness. "He didn't pay attention at all to the kid, so whether he knew he hit him or not, I can't say for sure."
On Tuesday, neighbors laid flowers at the spot where the crash took place.
Residents told Action News they were deeply upset by this tragedy, but not surprised.
"As tragic as it sounds, it doesn't surprise me because people just bulldoze through here all the time," said neighborhood resident Steven.
He says he's angry over this troubling incident.
"These lights on Centerville here are very short, so people will try and blitz through as quickly as possible," Steven noted.
As flowers were laid in honor of the 10-year-old, neighbors offered hugs and condolences to the grieving family. Police even came to the corner with a support dog to comfort those in need.
"We're rooted in community policing and we feel it's important that when the community needs the police, we're here to support them," noted Colonel Joseph Bloch with New Castle County Police.
There was no immediate word on whether the 17-year-old would be charged. New Castle County Police say this is an active and ongoing investigation.
School district officials say its crisis response team is assisting the mourning community.
Witnesses or anyone who may have captured the crash on video are being asked by police to come forward.