The married couple hired two jetskis earlier that day from a vendor at Karon Beach and reportedly rode them at high speed to Kata Beach.
While riding near Kata Beach the couple collided in the water at high speed and the woman suffered severe injuries to her neck and shoulders.
The man, who has not yet been identified, suffered only minor injuries.
The couple were rescued from the water by local lifeguards, who, along with the husband and rescue workers, performed CPR on the woman for 15 minutes before she was transported by ambulance to Chalong Hospital at 5pm.
The woman was pronounced dead on arrival at Chalong Hospital.
The woman's body has been sent to Vachira Hospital for further investigation into the cause of death.
The woman's family in Australia have been informed of her death.