The woman was underwater with her 43-year-old dive partner at a popular spot called Mindarie, about 35 kilometers (21 miles) north of Perth, when she was attacked, according to police.
Police said the man tried to pull her from the water following the attack, but she died before they made it to shore.
Western Australia Police Inspector Danny Mulligan said the woman's dive partner had "felt something go past him" in the water just before the attack.
"He didn't see the shark at that stage, but he felt it better to surface," Mulligan told CNN affiliate 7 News Australia.
"When he surfaced he saw a commotion in the water and then another boat arrived to pull him out of the water, and then it was noticed that the lady had suffered some severe and fatal injuries."
Mulligan said the three fisherman who were in the boat reported seeing a large shark while they were helping the pair.
"The other boat that was in the water was five and a half meters (18 feet) long, and they say that the shark was longer than their boat," he told 7.
Although the cause of death is yet to be confirmed, the Western Australian government said the woman's injuries were consistent with a shark attack.
"Given the nature of the injuries and the location of the incident, it is likely that a large white shark, greater than three meters (nearly 10 feet) in size is responsible," a statement on the government's SharkSmart
Second attack in a week
This is the second fatal shark attack off Australia's west coast in less than a week.
Ben Gerring, a 29-year-old surfer, died in hospital Friday after losing his leg below the knee in a shark attack off Falcon Beach in Mandurah, south of the West Australian capital Perth on Tuesday.
Shark attacks in Australia are not rare, but only two people died from 33 recorded attacks across the country in 2015, according to the Taronga Conservation Society's Australian Shark Attack File
The new fatalities are the only two deaths from shark attacks in Australia this year out of a total of 11 reported attacks so far.