Sgt. 1st Class Corey Hood of Cincinnati, Ohio, who had recently turned 32, was pronounced dead Sunday afternoon at Northwestern Memorial Hospital in Chicago, said Mario Johnson, a Cook County medical examiner's investigator.
Hood had logged more than 200 free fall jumps and 75 military static line jumps during his career, according to his Army biography.
The Army Golden Knights and Navy Leap Frogs parachute teams were performing what is known as a "bomb burst" Saturday when the collision occurred, Golden Knights spokeswoman Donna Dixon said. During the stunt, parachutists fall with red smoke trailing from packs and then separate, creating a colorful visual in the sky.
Dixon said Hood collided with a member of the Navy's precision skydiving team.
Hood was knocked unconscious, "which resulted in an uncontrolled offsite landing," Dixon said in a statement.
Spectator Heather Mendenhall told the Chicago Tribune on Saturday that she was watching the show from a rooftop and saw Hood strike the roof of a high-rise building next door with his feet and then fall - his parachute trailing behind him.
"His legs caught the tip of the roof, and then he fell over. It was horrible," she told the newspaper.
The other parachutist, who has not been identified, landed on North Avenue Beach near the main viewing area for the show, Fire Department spokesman Juan Hernandez said Saturday. He was treated for a broken leg.
The accident is under investigation, the Army said. The team did not perform again on Sunday.
"The Knights are a very close knit team and the military skydiving community is equally close; we will support Corey's family and each other during this difficult time," Col. Matthew Weinrich, commander of the U.S. Army Parachute Team, said in a statement.
Hood served five tours of duty in Iraq and Afghanistan and had earned numerous awards, including two Bronze Stars. He is survived by his wife, Lyndsay.
Chicago Mayor Rahm Emanuel called Hood "an American hero," saying in a statement late Sunday, "He defended our freedom, he amazed so many as a member of the Golden Knights, and he will be missed."
Specialists such as the Army and Navy jumpers can reach speeds of up to 180 mph during freefall by pulling their arms to their sides. They typically open their parachutes at around 5,000 feet, joining their canopies together in formation and setting off smoke grenades to send red smoke trailing behind them.
The annual two-day air show draws millions of people to Chicago's Lake Michigan shoreline. Headliners included the U.S. Navy Blue Angels.