The woman was one of two people shot by police in Cairns, in north Queensland, on Saturday night.
Ethical standards are probing the incident after a woman was hit by a stray bullet when officers opened fire on an armed offender.
Police had been called to Benjamina St, in the southern Cairns suburb of Mount Sheridan, about 5.10pm on Saturday following reports of a man armed with knives and an attempted armed robbery.
They located the 28-year-old man at a roundabout, and shot him.
"During the altercation, a civilian woman also sustained a gunshot wound," police said in a statement on Sunday.
"Both the man and woman were transported to Cairns Base Hospital for treatment."
No police officers were injured.
Police Minister Dan Purdie was reluctant to comment in detail on the incident as it was under investigation, but said he had seen footage of how it played out.
"They are highly trained. They do have equipment, and I'm sure some of those operational matters have probably all been answered by the police this morning," he told reporters on the Gold Coast on Sunday.
"I acknowledge the situations, the dangerous situations, police have put themselves in."
It's the second high-profile Queensland police shooting in three days.
It follows the shooting of a police officer and the death of a man following a domestic dispute at Yengarie, near Maryborough, on the state's Fraser Coast, on Friday evening.
It is alleged the 45-year-old man approached and fired upon a group of 10 officers attending a call-out.
A first-year constable sustained a gunshot wound to the leg, with the man believed responsible later found dead in a backyard shed.
The incident is being investigated by the Ethical Standards Command, with oversight by the Crime and Corruption Commission, reporting to the coroner.
The incidents came as the Queensland government on Sunday celebrated the success of Jack's Law, which became permanent a year ago.
The law gives police the ability to use handheld metal detectors in all public places, allowing officers to detect deadly weapons before they can be used and intervene before lives are changed forever.
The law is named in honour of 17-year-old Jack Beasley, who was fatally stabbed during a night out with friends at Surfers Paradise in 2019.
Mr Purdie said more than 1300 dangerous weapons have been removed from the streets, potentially preventing countless tragedies.
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