The corpse was first spotted this morning by a local man who had gone to collect crabs.
At first, he thought it was just an abandoned stolen motorbike, but when he spotted white shoes sticking out of the water, he alerted authorities at once.
The body is believed to have been dead for at least a day, but police are awaiting an autopsy to confirm this.
The deceased was identified as Ms Chertchai Junsuksi, 66, or better known as Pa Rin, a well-known Thai sweets vendor operator at the Kaset Market in Phuket Town.
Ms Chertchai, who lived alone not so far from the area where she died, is survived by one son, whose wherabouts are unknown at this point.