The 50-year-old woman was swimming with the young family member on Tuesday evening at Park Beach in Coffs Harbour.
Emergency services were called to the beach about 5pm and told the pair had been swept out to sea.
The child was brought safely to shore, while the woman was found unresponsive in the water a short time later.
She was brought to the beach where CPR was performed, but she was unable to be revived.
Police established a crime scene and began inquiries into the circumstances surrounding the incident.
The woman's death is at least the 36th drowning in Australia since the start of summer, following a particularly deadly Christmas and New Year period.
The period is commonly the deadliest for drownings as Australians flock to often remote and unfamiliar waterways.
A four-year-old girl and six-year-old boy died after they were found unconscious in Perth's Swan River near where revellers had gathered for New Year celebrations.
The children, from separate families, were spotted in the water at a popular family picnic spot and were unresponsive when members of the public pulled them from the river.
Two days after Christmas, a two-year-old girl died after being pulled unconscious from a backyard pool in northern NSW.
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