The woman has been named by local media as Kerri Pike, a mother of eight.
The two others were discovered soon afterwards, where they had become entangled in a nearby tree.
Paramedics confirmed their death on the scene.
An eyewitness was quoted as saying: "You could see one chute was tangled and it wasn't opening".
"I was just watching him in free fall until he went behind the trees, and that was the last I saw", he said.
'I don't understand how three people could have died, unless someone was trying to catch them. Clothing and a walking stick belonging to 79-year-old Anne Cameron were found with human remains by a creek near Port Douglas on Thursday.
Two men aged in their 30s and a woman in her 50s are thought to have collided while skydiving near Cairns in northeastern Australia. Police, the Australian Parachuting Federation and other investigators remain on the scene.
Police have not yet released further details of the crash.
Skydiving is a popular tourist activity in the area, with numerous backpackers who travel the Queensland coast stopping by Mission Beach.
The company said skydiving operations have been suspended at Mission Beach while authorities investigate the incident.
Three people died yesterday in what is believed to be a mid-air skydiving collision, with one of the victims found in someone's garden.
Mission Beach, located between Cairns and Townsville, is a regular skydiving spot for tourists, with the fatalities the worst in the industry's history for the region.