Following consultations with the Directorate of Public Prosecutions it was decided to prosecute the man on a charge of culpable homicide, Colonel Jay Naicker said on Friday.
Stander, 25, was returning from a training ride in Shelley Beach on the KwaZulu-Natal south coast on Thursday afternoon when the fatal collision took place.
Beeld reported that it happened outside his cycling shop, Concept Cyclery. Stander's father Charles, the shop's manager, heard the crash.
Durban's Daily News reported that local cyclists would dedicate their moonlight mass ride on Saturday to Stander. The paper quoted eyewitness Kevin Govender as saying that Stander's family was at the scene within minutes of the accident.
Govender said the taxi driver was in shock and "seemed like he did not know what to do".
"He told me it was his bad luck and said that he had not seen the cyclist and did not know how the accident happened," Govender was quoted as saying. He had watched as Stander's wife Cherise clutched Stander's body.
"That is one of the saddest things I have ever seen. His mother was completely distraught. I could not sleep as this incident kept coming back to me. It was very sad," he said.
Stander was fifth in the men's cross country race at the 2012 London Olympics. Four years earlier, at the Beijing Games, he finished 15th in the cross country event at the age of 20.
The following season he rose to prominence on the global stage when he won the Under-23 title in the Mountain bike World Cup series.
In 2011, Stander became the first South African to win the Cape Epic stage race in the Western Cape, with Swiss partner Christoph Sauser. The pair defended their title in 2012. – Sapa