Police said the 20-year-old from Crawley suffered serious head injuries after he and two other men were hit by a car in Marine Parade early on Sunday (December 1).
Officers were initially called to a report of a large group of people fighting on the seafront at 5.20am. As they responded, it was reported that three of the group had then been struck by a car.
The two other victims, an 18-year-old man and a 22-year-old man, who were also seriously injured, remain in a serious condition in hospital, police said.
A 32-year-old man who was arrested on Sunday on suspicion of causing grievous bodily harm has now been released under investigation. A 33-year-old man who was detained on suspicion of attempted murder on Monday morning (December 2) remains in custody.
The vehicle, a BMW X6, was later found abandoned nearby.
Detective Chief Inspector Chris Friday of the Surrey and Sussex Major Crime Team: "Our thoughts are with the family and friends of the victim who has sadly died this evening and with those of the other two victims who are in serious condition in hospital.
"This is now a murder investigation and we are again appealing for anyone who may have seen the incident or has any information about it to come forward.
"We are particularly keen to hear from anyone who may have mobile phone footage, dashcam footage or anyone with private CCTV footage of the incident.
"Marine Parade is likely to remain closed between the pier roundabout and Camelford Street until Tuesday afternoon (3 December) while we are continuing searches and carrying out enquiries and I would like to thank the public for their patience."
The incident is not terror-related, according to police.
If you can help with the investigation please report online or ring 101 quoting Operation Danebridge.