Catalysis of the reaction: 1-deoxy-D-xylulose 5-phosphate + 3-amino-2-oxopropyl phosphate = 2 H2O + H+ + phosphate + pyridoxine 5'-phosphate.
1-deoxy-D-xylulose-5-phosphate:3-amino-2-oxopropyl phosphate 3-amino-2-oxopropyltransferase (phosphate-hydrolysing; cyclizing) activity