Doreen Collyer, originally from England, was killed at a popular spot called Mindarie, about 21 miles north of Perth.
It was the second fatal shark attack in the area in less than a week - after a surfer who had his leg bitten off died on Friday.
Doreen, 60, moved to Australia from Chester in England around five years ago with her husband Dave - where she is believed to have fallen in love with diving.
This morning he paid tribute to his ”loving wife” - describing her as “a beautiful person” who everyone loved.
Colleagues at the University of Chester where she worked for 15 years also paid tribute - opening a book of condolence - saying her "students were at the heart of all she did".
Mr Collyer was on his way to meet his wife and her diving companion - who were diving for crayfish - on Sunday afternoon when he spotted helicopters hovering overhead.
It was only when he arrived at the boat ramp that his worst fears were confirmed — Doreen had been killed by a shark.
Her dive partner - known only as John, aged 43 - revealed that around 25 minutes into the dive he "felt something go past him" and decided to surface.
It was only after he came up that he is said to have seen that his friend had been badly attacked. Cops said he tried to pull her from the water, but she died before they could make it to the shore.
Western Australia Police Inspector Danny Mulligan said: "He didn't see the shark at that stage, but he felt it better to surface."
"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."
The three fisherman who were in the boat reported seeing a large shark while trying to help the pair. They used their vessel to try to shield John from also being attacked by the 5m-long shark.
They added: "The other boat that was in the water was five and a half metres (18ft) long, and they say that the shark was longer than their boat."
John described Mrs Collyer as a “phenomenal” diver. She is believed to have held an advanced open water diver’s certificate and dived up to four times a week during the summer.
However Mr Collyer said that yesterday was the first time in weeks his wife had been out due to the recent poor weather.
The couple have two adult children — a son and daughter — and a young grand-daughter.
They moved to Iluka in Australia to be closer to their son who had emigrated with their grand-daughter. Mr Collyer said: “Doreen was a beautiful person and everyone loved her, she was a devoted grandmother, mother and loving wife."
Doreen, 60, worked as a lecturer at Edith Cowan University (ECU) where she specialised in children's nursing.
She previously worked for 15 years at the University of Chester in England.
Professor Annette McIntosh-Scott, Executive Dean of the Faculty of Health and Social Care, said: “We are deeply saddened to hear of her death.
"Doreen was a hugely valued and loved member of staff. She will be remembered as someone with a real commitment and passion for teaching and child health care - her students were at the heart of all she did.
"Our heartfelt thoughts and prayers go out to her husband and family.
“A book of condolence will be set up at the University, as well as a Facebook page, for former colleagues and students to leave their personal tributes.”
ABC News reported Ms Collyer was director of postgraduate studies and a lecturer at the university's School of Nursing and Midwifery.
ECU's Acting Vice Chancellor Arshad Omari described Ms Collyer as "a much loved and respected colleague, mentor and teacher".
He said: "She made many valued contributions to ECU in the area of children and young people's nursing.
"On behalf of the entire ECU community, I extend my sincerest condolences to her family in what is a very difficult time."
The cause of death remains unconfirmed, but Mrs Collyer's injuries were consistent with a shark attack.
Meanwhile the public have been warned to 'Stay out of the water' until further notice.
The Australian government website SharkSmart announced in the early hours of this morning: "There has been a determination that a serious threat to public safety exists".
Beaches have been closed and authorities are deploying shark capture gear.
It is not known for definite if the same shark is responsible for both deaths - but anyone who spots a shark is being urged to call the police.
An order has been issued by the Director General of the Department of Fisheries to deploy to fish for the shark from early this morning.
So far all that is known is that it is likely to be a 'large white shark', at least 3m or 10ft in size - although the fishermen who saw it claim it was bigger than their 18ft-long boat.
The Jaws film featured a 'great white shark' which was around 25ft-long.
As a precaution, the The City of Wanneroo has closed beaches either side of Mindarie Boat ramp, south from Claytons Beach and Surf Spot and north to Quinns Beach. Beaches. They will remain closed for at least the rest of the day and possibly beyond.
A statement on SharkSmart said: "Given the nature of the injuries and the location of the incident, it is likely that a large white shark, greater than three metres (nearly 10 feet) in size is responsible,"
On Friday surfer Ben Gerring, 29, died in hospital after losing his leg below the knee in a shark attack off Falcon Beach in Mandurah, south of Perth three days beforehand. He had been set to become a father for the first time.
Last year only two people died from 33 recorded attacks across Australia, according to the Taronga Conservation Society's Australia Shark Attack File.
This year so far there have been 11 reported attacks.