Two of the victims died at the scene and two others at a Midland hospital.
One of those hospitalised was in critical condition and one was airlifted to a medical facility in Lubbock, a police statement said late yesterday. Four others were in stable condition and 10 were treated and released.
Police earlier in the day had said that 10 people were in critical condition and a total of 17 people were injured.
The tragedy happened as two flatbed trailers carrying veterans from the Iraq and Afghanistan wars, some who suffered major injuries in combat, attempted to cross railroad tracks during the "Hunt for Heroes" parade.
"The first flatbed crossed the train tracks completely. The second did not make it across before being struck by the train," the police statement said.
It described a scene of veterans and their spouses seated on chairs attempting to jump off the trailers to escape the collision. There were 26 people on the float hit by the train including a dozen veterans, a dozen spouses and two escorts.
"It's hard to look at. It's a very tragic event, very unfortunate," said Midland Police Chief Price Robinson, speaking from the site of the accident.
Hours after the accident, one of the floats was still sitting near the train tracks, white poster board adorning the side and about a dozen empty chairs sitting on the trailer bed.
The parade kicked off a weekend of events, including the banquet and a hunting expedition, to honour wounded veterans, Cleere said. Those events have now been cancelled.
A Union Pacific Corp spokesman said the National Transportation Safety Board was involved in the crash investigation, and referred all questions to that agency. A spokeswoman for the NTSB said investigators were on their way to the scene.
Many of the 25 west Texas veterans being honoured served multiple deployments in Iraq and Afghanistan, according to biographies posted on a website created by event organisers. They were described as having been shot on the battlefield or wounded by improvised explosive devices.
Some described suffering traumatic brain injuries and post-traumatic stress disorder as a result of their deployments, the biographies said.
Tracy Scott, a Midland oilfield worker who did not witness the crash but arrived at the scene later, said the train did not derail, but continued to move roughly half a mile past where the collision occurred before coming to a stop.
Photos posted on the website of The Midland Reporter-Telegram showed a double-decker freight train stopped at the road crossing, with debris scattered around a flatbed trailer and chairs in disarray after tumbling off the parade float. Each chair had the name of a veteran below it.
Authorities did not immediately release the names of those injured or killed.