It happened just after midnight Friday at the intersection of Bustleton Avenue and Rennard Street in the city's Somerton section.
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Police identify the officer as 50-year-old Henry Gonski III.
"It's with a heavy heart that we learn of the tragic passing of dedicated, police officer, Henry Gonski, III killed in an off-duty accident last night. Our friend and colleague served this city for some 27 years with distinction, honor and integrity. We pray for his family, friends, and colleagues. The FOP will never forget his dedication and contributions to the police department and this city," FOP Lodge #5 President, John McNesby, said in a statement Friday afternoon.
Chief Inspector Scott Small said the officer was a few blocks from his home when the crash happened.
According to police, an 18-year-old was driving a BMW at a high rate of speed on Bustleton Avenue when he T-boned the officer, who was traveling on Rennard Street.
The BMW struck the passenger side of the officer's Hyundai sedan.
After the impact, the 18-year-old then crashed head-on into a tree.
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The teenage driver and the 16- and 17-year-old passengers who were in the car with him suffered minor injuries and declined medical treatment, police said.
Medics rushed Gonski to the hospital where police said he was pronounced dead.
Witnesses told investigators the 18-year-old was speeding down Bustleton Avenue right before the crash.
"According to accident investigators, the damage to both of these vehicles is so heavy that they believe speed was a factor," Small said. "It doesn't appear that there was any drunk driving. It does not appear that there were any narcotics involved. The driver of the striking vehicle does not appear to have been impaired in any way."
Officers released the 18-year-old to his family on scene after he passed a field sobriety test and they determined he was not impaired.
Small said this is an ongoing investigation and that charges are still possible as they work to gather additional evidence.